Petco Buys Ailing Pet Metro Chain : Acquisitions: Sale is approved for $3.1 million. Some creditors are unsatisfied with price.

SANTA ANA —  Financially troubled Pet Metro on Thursday became the latest victim of the ongoing pet store industry consolidation when its four outlets were acquired by industry leader Petco Animal Supplies Inc.

U.S. Bankruptcy Judge James W. Barr in Santa Ana approved the sale of four open Pet Metro stores and three vacant storefronts to Petco for $3.1 million. Disgruntled creditors had forced Pet Metro into bankruptcy proceedings in April after the company failed to complete an initial public stock offering that was designed to raise about $25 million.

Creditors, who are still owed $20 million from Irvine-based Pet Metro, voiced dissatisfaction with the sale price.

“Petco threw us a bone and we took it rather than watch the company continue to lose money,” said attorney Richard Marshack, who represented creditors in the bankruptcy proceeding. “We took the money because it was obvious that the [company] couldn’t reorganize its affairs successfully.

“Creditors are having their accountants review the Pet Metro books,” Marshack said. “They are investigating any potential claims against broker-dealers and company insiders.”

San Diego-based Petco plans to operate the four Pet Metro stores it acquired in Pasadena, Huntington Beach, San Diego and Riverside. Petco Chairman Brian Devine said Thursday that his company will close a handful of its smaller stores near the larger and newer Pet Metro locations. Petco also plans to open three vacant stores that cash-strapped Pet Metro couldn’t afford to launch.

“This is just part of the ongoing consolidation in the pet store industry,” Devine said. “This is the fourth chain we’ve acquired in the past year and a half.”

Petco, with 220 locations, is one of the nation’s largest pet store chains. In recent months, Petco and a handful of other larger competitors have been snapping up smaller chains as they duel for national dominance.