Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comKey Contacts
Back
Fresh & Easy files for Chapter 11 bankruptcy protection
On Oct. 30, Fresh & Easy, the U.S.-based grocery chain launched by UK supermarket giant Tesco PLC in 2007, announced that it had filed for Chapter 11 bankruptcy protection. According to a Reuters report, Fresh & Easy plans on winding down operations for all of its stores as it looks to sell off its remaining assets.
Fresh & Easy falls into debt
In its bankruptcy documents, the Fresh & Easy cited a lack of personalized products for each neighborhood store, limited inventory for popular items and rising prices for Fresh & Easy’s own brand of products. My Valley News reported that Fresh & Easy’s unique packaging system for fruits and vegetables prevented customers from inspecting its products, which led to a substantial drop in produce sales.
The company also stated that expanded food offerings from retail giants like Wal-Mart and Target as well as increasing competition among e-commerce grocery outlets contributed to rapidly declining revenues since 2014. Further, a lack of steam in the fresh format grocery sector with only a 1.3 percent dollar share, left the company unable to compete with traditional supermarkets and big box retail stores.
While the company made progress in the last year by re-allocating capital to fewer stores with a higher level of convenience and inventory, their losses left them insolvent. In a Supermarket News report, Fresh & Easy listed assets between $10 million to $50 million, but debts ranging from $100 million to $500 million. It has a list of over 30 top-ranking unsecured creditors including Harvest Meat Company Inc. for over $1 million, Hidden Villa Ranch for $909,000 and Pak West Paper and Packaging for more than $481,000.
Fresh & Easy’s second Chapter 11 filing in as many years
Fresh & Easy’s decision to seek Chapter 11 bankruptcy protection marks the second time in consecutive years it has done so, according to the Orange County Register. The company filed its previous bankruptcy petition in 2014, just one year after Tesco PLC sold Fresh & Easy to investment firm Yucaipa Cos. As part of the deal, Yucaipa provided more than $120 million in financing to Fresh & Easy under a restructuring plan that re-focused the store locations on convenience, fresh foods and ready-made meal products. However, the chain quickly became insolvent, which prompted Yucaipa to close 69 locations in 2014.
Prior to the bankruptcy filing, the company closed 97 of its remaining 167 stores and began substantial product markdowns, according to a CSPNet.com report. Further, the company’s website has been shut down except for a link to a statement from its executive directors on where to file claims in the bankruptcy settlement.
The reorganization plan
Fresh & Easy plans to liquidate all of its assets, with expected store closings and sales. As part of the reorganization plan, the court has approved an agreement reached between the company and Hilco Merchant Resources to purchase Fresh & Easy’s remaining inventory.
In its bankruptcy documents, the company also stated its desire is to emerge from the bankruptcy period as a viable business with a fresh influx of capital.
Are you a creditor in a bankruptcy? Have you been sued by a bankrupt? If you have any questions about your rights, please contact me, Joel Glucksman, at 201-806-3364.
- Practices: Corporate Transactions & Business, Bankruptcy & Creditors' Rights, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
IP Infringement: What Steps Can You Take If You're Affected?
IP infringement occurs when someone uses your intellectual property without your permission or beyond the scope of the permission you granted. Common examples of IP infringement include copying a product’s patented features or using a trademarked logo in a way that is likely to confuse consumers about the source or affiliation of goods or services. […]
Author: Michael Mietlicki
Public Allegations, Unfinished Investigation: What New Jersey Businesses Should Do Next
When facing public allegations of wrongdoing, companies should not let the speed of the public conversation dictate the speed of an investigation. An investigation designed to confirm a preferred narrative rather than establish the facts can create serious problems later, particularly if litigation, regulatory scrutiny, or employment claims follow. Key Takeaways When public allegations surface […]
Author: Sean M. Pena
BESS Interconnection: Managing Grid, Cost, and Schedule Risk
For battery energy storage system (BESS) developers, securing equipment and site control is only part of the development equation. A project must also connect to the electric grid, and increasingly, BESS interconnection is one of the biggest sources of schedule, cost, and contractual risk. Key Takeaways This article is Part 3 of our Battery Storage […]
Author: Nicholas Wall
Navigating Director and Officer Liability in Times of Financial Distress
Director and officer liability increases sharply when a company is in financial distress. Decisions that would draw little attention in a healthy business can later be challenged by creditors, shareholders, bankruptcy trustees, and regulators as breaches of fiduciary duty, fraudulent transfers, or oversight failures. Understanding where that exposure comes from, and how to manage it, […]
Author: Michael Mietlicki
Before You Buy: Managing Real Estate and Permitting Risk for BESS Projects in New York and New Jersey
For developers pursuing battery energy storage system (BESS) projects, finding the right property is only the beginning. BESS site selection is as much a legal and transactional exercise as a real estate decision, with risk analysis central to the project’s ultimate success. Key Takeaways The core questions for BESS site selection in New York and […]
Author: Nicholas Wall
What Business Owners Get Wrong Before Meeting a Litigation Attorney
What should you expect when meeting a litigation attorney about a business dispute? You should expect to describe the dispute in your own words, hand over the most important documents, flag any deadlines or immediate threats, and leave with a clearer picture of the problem, what information is still needed, and the likely next steps. […]
Author: Michael Mietlicki
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.