Fresh & Easy Files for Chapter 11
Tesco-owned Fresh & Easy Neighborhood Market Inc. has filed for Chapter 11 bankruptcy, just three weeks after investment firm Yucaipa Cos. agreed to purchase the grocer.
In a court filing made earlier today in Delaware, the struggling chain cited debt between $500 million and $1 billion.
“Today's filing is simply the next step in the restructuring process to sell the business to The Yucaipa Companies and will have no impact on our customers' shopping experience,” Brendan Wonnacott, director of neighborhood affairs for Fresh & Easy told Progressive Grocer. “It’s business as usual as we continue the transition to new ownership.”
According to some, Yucaipa managing partner Ron Burkle plans to use Fresh & Easy’s existing facilities and infrastructure to relaunch the Wild Oats grocery chain, for which it filed a trademark application this past summer, according to published reports.
According to Bloomberg Businessweek, Fresh & Easy bankruptcy filing enables Tesco to back out of leases and auction off the brand’s assets. Yucaipa would then have the right to bid first for the chain -- via an affiliate -- in a November court auction.