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Dollar Tree fires new volley in Charlotte dollar-store legal battle

Matthews discount retailer Family Dollar, owned by Dollar Tree, has agreed to pay $45 million to settle a gender bias lawsuit that dates back to 2002.
Matthews discount retailer Family Dollar, owned by Dollar Tree, has agreed to pay $45 million to settle a gender bias lawsuit that dates back to 2002.

In the latest move in a dollar-store legal battle, Virginia-based Dollar Tree is asking a Delaware court to dismiss a suit that alleges it tried to “kill” the business of now-defunct Charlotte rival Dollar Express.

In June, Dollar Express sued Family Dollar and parent company Dollar Tree for allegedly trying to sabotage its startup operations by promoting unqualified workers and opening new Family Dollar stores in close proximity to Dollar Express stores.

Private equity group Sycamore Partners started the Dollar Express chain in 2015 when it bought roughly 330 stores from Matthews-based Family Dollar. Regulators required Virginia-based Dollar Tree to sell the Family Dollar-branded stores for antitrust reasons in order to buy the local chain.

In late March, Sycamore, however, abruptly laid off Dollar Express’ employees and sold the stores to Tennessee-based Dollar General, saying it could “no longer operate as a viable standalone business.” Soon after that, Dollar Express and Dollar Tree exchanged lawsuits.

In its own lawsuit filed in Delaware Chancery Court, Dollar Tree has accused Dollar Express of siphoning off funds and failing to pay Dollar Tree over $50 million for goods and services.

In its latest filing Friday, Dollar Tree is now seeking to have Dollar Express’ claims against the company dismissed. In the filing, Dollar Tree says Sycamore Partners “failed to invest required capital in the fledgling company or even to make the most basic preparations for its operation as a long-term business.”

A spokesman for Dollar Tree declined to comment Monday beyond the filing. Sycamore Partners also declined to comment.

Dollar General has said it is converting the Dollar Express stores it bought to the Dollar General banner, including two stores in Charlotte at 5300 South Blvd. and 1437 E. Sugar Creek Road.

Rick Rothacker: 704-358-5170, @rickrothacker

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