(Bloomberg) -- A group of state attorneys general joined forces to stop Albertsons Cos. from paying $4 billion to shareholders as a special dividend before state and federal antitrust reviews of the grocery chain’s potential merger with rival Kroger Co.

A complaint filed Wednesday in federal court in the nation’s capital by officials for the District of Columbia, California and Illinois follows an earlier suit by Washington state accusing Albertsons and Kroger of running afoul of antitrust and consumer protection laws. 

Like their counterpart in Washington state, District of Columbia Attorney General Karl Racine and California Attorney General Rob Bonta said they’re seeking a temporary restraining order to block Albertsons from handing out the dividend while the legal fight proceeds.

Read More: Albertsons Urged by AGs to Pause $4 Billion Payout Amid Deal

“Albertsons’ rush to secure a record-setting payday for its investors threatens District residents’ jobs and access to affordable food and groceries in neighborhoods where no alternatives exist,” Racine said in a statement, which noted that the complaint was filed under seal from public view.

Albertsons had announced the dividend after agreeing to merge with Kroger in a deal valued at $24.6 billion. In an Oct. 28 letter reviewed by Bloomberg, the supermarket chain told several attorneys general that the payment is independent of the merger and part of a plan to return capital to shareholders. The deal is expected to close in early 2024.

“The lawsuit brought by the Washington state attorney general is meritless and provides no legal basis for canceling or postponing a dividend that has been duly and unanimously approved by Albertsons Cos.’ fully informed board of directors,” an Albertsons spokesperson said in a statement.

“The decision to issue a special dividend was made solely by Albertsons” and is “independent of the merger transaction,” a Kroger spokesperson said in a statement, adding that Kroger remains committed to working with the Federal Trade Commission, state attorneys general and others “to complete the transaction and unlock the many benefits it offers.”

Making payments to the tune of $4 billion, through cash on hand and loans, “will cripple Albertsons’ ability to operate its stores and meaningfully compete with Kroger during the time before the deal closes and leave it in a weakened state if the deal subsequently falls apart,” Washington state said in its lawsuit, which was filed in state court in Seattle.

The $4 billion “special cash dividend” amounts to “a windfall” to a consortium of private equity firms that back Albertsons, the state said.

“Decreased liquidity thus has the potential to do things like reduce Albertsons’ ability to purchase inventory, such as baby formula, and stock its retail store shelves for consumers who need it to sustain lives of infants,” the state said. That could also lead to layoffs, the state said.

“The allegation that this dividend will somehow hinder our ability to compete in the marketplace is also meritless,” the Albertsons spokesperson said.

Last week, Racine, Bonta, Washington State Attorney General Bob Ferguson and their counterparts from Arizona, Idaho and Illinois urged Albertsons in a letter to hold off on the dividend while they review the pending merger, saying it could be a “massive improper giveaway to certain shareholders.”

Bonta said in a statement Wednesday: “This proposed merger is far from a done deal, making Albertsons’ decision to give away one-third of its market cap very concerning.”

The grocery chain rejected the request by the attorneys general in the Oct. 28 letter.

Canceling the dividend “would expose Albertsons to significant legal and financial liability” as trading in the stock ex-dividend is ongoing and “investors of all sorts are acting in reliance” on the plans, the company wrote. “Accordingly, Albertsons cannot comply with the states’ request to delay payment of the special dividend.”

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