After much speculation, Tesco's Fresh & Easy Neighborhood Market has filed for bankruptcy protection, just weeks after it was announced that Yucaipa Cos. would buy most of the chain's stores. The bankruptcy filing lists debts of more than $500 million and assets of $100 - $500 million.
According to Fresh & Easy, the move is "the next step in the restructuring process" and will have no impact on customers. According to reports, Tesco plans to back out of certain leases while in bankruptcy, and then auction off the company's remaining assets. Yucaipa would have the right to bid first for the chain in a court action later this year.
Tesco previously planned to pay Yucaipa $235 million to assume the supermarket chain's liabilities. As part of the agreement, Yucaipa would own and operate about 150 of the stores we well as a distribution facility, and close the remaining 50 stores. The deal included a loan of about $125 million from Tesco to help Yucaipa fund the operations.
There is still speculation by analysts that once Yucaipa owns the chain, it will relaunch the Wild Oats Markets brand, which has been closed since 2007. As reported in the LA Times, a trademark application filed by Wild Oats Marketing surfaced this summer with a Yucaipa office address.