Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

Fresh & Easy files Chapter 11

Author: Joel R. Glucksman

Date: December 30, 2015

Key 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.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
SEC Takes Actions Against Issuers for Failure to File Form D post image

SEC Takes Actions Against Issuers for Failure to File Form D

In December, the U.S. Securities and Exchange Commission (SEC) announced charges against two privately held companies for failing to file a Form D notice, which is generally utilized for exempt securities offerings. Here, the SEC’s enforcement sends a strong message: compliance with regulatory requirements is not optional and failure to comply can have significant consequences. […]

Author: Kenneth C. Oh

Link to post with title - "SEC Takes Actions Against Issuers for Failure to File Form D"
Redefining Labor Relations: NLRB's Pivot from Abruzzo’s Memoranda post image

Redefining Labor Relations: NLRB's Pivot from Abruzzo’s Memoranda

On February 14, 2025, the Office of General Counsel (OGC) of the National Labor Relations Board (NLRB) under Acting General Counsel William B. Cowen issued Memorandum 25-05, “New Process for More Efficient, Effective, Accessible and Transparent Case handling.” The Memorandum rescinds nearly all of the Memoranda issued by his direct predecessor, Jennifer Abruzzo, setting the […]

Author: Matthew F. Mimnaugh

Link to post with title - "Redefining Labor Relations: NLRB's Pivot from Abruzzo’s Memoranda"
What Are FIRPTA Withholding Requirements? post image

What Are FIRPTA Withholding Requirements?

If you purchase real property from a foreign person or entity, you may be required to withhold taxes from your payment to the seller under the Foreign Investment in Real Property Tax Act (FIRPTA). The federal tax law is designed to ensure that foreign sellers pay any applicable capital gains tax on profits realized from […]

Author: Jesse M. Dimitro

Link to post with title - "What Are FIRPTA Withholding Requirements?"
Does Your Homeowners Insurance Provide Adequate Coverage? post image

Does Your Homeowners Insurance Provide Adequate Coverage?

Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]

Author: Jesse M. Dimitro

Link to post with title - "Does Your Homeowners Insurance Provide Adequate Coverage?"
Understanding the Importance of a Non-Contingent Offer post image

Understanding the Importance of a Non-Contingent Offer

Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]

Author: Jesse M. Dimitro

Link to post with title - "Understanding the Importance of a Non-Contingent Offer"
Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC post image

Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC

Business Transactional Attorney Zemel to Spearhead Strategic Initiatives for Continued Growth and Innovation Little Falls, NJ – February 21, 2025 – Scarinci & Hollenbeck, LLC is pleased to announce that Partner Fred D. Zemel has been named Chair of the firm’s Strategic Planning Committee. In this role, Mr. Zemel will lead the committee in identifying, […]

Author: Scarinci Hollenbeck, LLC

Link to post with title - "Fred D. Zemel Appointed Chair of Strategic Planning at Scarinci & Hollenbeck, LLC"

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.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!

Please select a category(s) below: