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EL SEGUNDO, Calif. -- Tesco plc's Fresh & Easy Neighborhood Market chain filed for Chapter 11 bankruptcy yesterday, Sept. 30, just three weeks after investment firm The Yucaipa Cos. LLC agreed to purchase the business.
In its court filing, the struggling chain cited debt of 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 Cos. and will have no impact on our customers' shopping experience,” Brendan Wonnacott, director of neighborhood affairs for Fresh & Easy, told Progressive Grocer, a sister publication to Convenience Store News. “It’s business as usual as we continue the transition to new ownership.”
According to media reports, Fresh & Easy's bankruptcy filing now 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.
Ron Burkle, managing partner of Yucaipa, has said he plans on continuing to build Fresh & Easy into a "next-generation convenience retail experience," providing busy consumers with more local and healthy access for their daily needs.
Former 7-Eleven Inc. CEO Jim Keyes has reportedly been chosen to oversee Fresh & Easy once the sale is formally completed between Tesco and Yucaipa. According to a published report citing industry sources, Keyes and Fresh & Easy CEO Tim Ashdown met recently with employees at Fresh & Easy's stores and distribution center to discuss long-term plans for the company.
Keyes served as CEO of Dallas-based 7-Eleven Inc. from 2000 to 2005.