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Dahl's Foods announced Monday that the company has filed a Chapter 11 bankruptcy, and a Kansas City company has agreed to buy the company’s operating assets.View videoDahl's said its stores will remain open and operate as normal during the process.DAHL'S BANKRUPTCY:Chapter 11 bankruptcy will allow the company to reorganize and obtain necessary financing. Court documents list Dahl's bankruptcy filing with $44 million in assets, which is for the most part property and liabilities of $41 million, including $37 million in secured claims with the largest by Associated Wholesale Grocers.The long list of creditors holding unsecured claims has some familiar names and substantial dollar amounts. The list includes Holmes' Murphy in West Des Moines at $364,000 for an umbrella insurance policy, Anderson Erickson Dairy for $255,000, MidAmerican Energy for $126,000, Frito Lay at $79,000, Pepsi at $57,000 and at the bottom of the list is $134 to Ebert Honey of Lynnville."Our board has approved the sale of the company, which will ensure that the stores come out of this stage successfully. Right now, our focus is on preserving our workforce and continuing to provide a competitive and connected store experience for customers," said Craig Moore, Dahl's CEO.Associated Wholesale Grocers, Inc. said it has entered into an agreement with Dahl's to buy the company's operating assets. AWG is a member-owned wholesale grocery cooperative serving over 3,000 retail member stores nationwide.CUSTOMER REACTION:Charlie Lake has been shopping at Dahl's on Ingersoll Avenue for 50 years."I saw this store come out of the ground," said Lake. He said he wasn't surprise to hear of the bankruptcy and sale.The announcement leaves longtime customers with questions and concerns about what comes next."I don't know what the company is but let's just hope they keep the doors open," said customer Kaity Thies.NEW OWNER:Associated Wholesale Grocers said the stores will be remodeled and updated, and steps are being taken to build a new brand and identity for Dahl's."The current team at Dahl's had commenced rebuilding this chain and we believe they have a good plan but the financial position they found themselves in was just too big to overcome," said Jerry Garland, president and CEO of AWG.The move gives AWG a foothold into the Des Moines market.A quick scan of the Metro Des Moines area shows more than 80 stores that have groceries including Dahl's, Hy-Vee, Fareway, Campbells, Whole Foods, Traders Joes, ALDI, Gateway Market, Walmart Supercenters, Target, Save-A-Lot, Family Dollar and Dollar General. That's before you count Casey's, Kum & Go, Walgreens and others that carry at least basic grocery items.HOW CAN DAHL'S COMPETE?Tom Root is an associate professor of finance at Drake University. He said Dahl's has fallen into a very undesirable spot in the marketplace."Hy-Vee is the market leader for grocers in central Iowa, expanding at a dizzying pace with larger and larger stores that offer a long list of services while Dahl's -- a longtime metro favorite way before Hy-Vee showed up -- has fallen way behind.Root said closing three store locations this year and news of problems with the company's retirement plan were signs of larger problems."They're not able to keep up with what the big stores do, but they're better and fancier than the Fareways and the ALDIs. So they're kind of in a middle ground, and that's a really tough area to be in between the really higher end type and the lower end type of idea and that kind of leaves them stranded," said Root.Root said the next step for the owners of Dahl's must be to restructure and find a niche they can survive. Dahl's must either pour a lot of money into improving the product or they must cut costs and focus on competing with stores like the ALDI and Fareway.Check KCCI.com and KCCI 8 News for updates on this developing story.