Fresh & Easy moving forward with bankruptcy

Fresh &Easy Neighborhood Market Inc.’s bankruptcy hearing in Delaware is scheduled for today.

The chain filed for Chapter 11 bankruptcy in U.S. Bankruptcy Court soon after Los Angeles billionaire Ron Burkle agreed to purchase most of it through his Yucaipa Cos. with the help of a $126 million loan from the chain’s parent company, Britain-based Tesco PLC. The Chapter 11 restructuring cites a debt between $500 million and $1 billion for the grocery chain.

Founded in 2006, Fresh &Easy has 167 grocery stores in California, Arizona and Nevada, and a production facility in Riverside, Calif., according to the filing. For the 12 months that ended Feb. 24, 2013, the stores generated $1.1 billion in revenue.

Included in the bankruptcy are 192 real property leases of which 183 are nonresidential leases.

To date, 34 leases attached to Fresh &Easy stores have closed. The restructuring will allow Fresh &Easy to back out of those leases.

The Las Vegas area has seven of these locations: 4810 W. Ann Road, 317 N. Nellis Blvd., Boulder Highway and Russell Road, 6100 Vegas Drive, 6685 E. Lake Mead Blvd., 2950 E. Desert Inn Road and 10 N. Eastern Ave.

Nineteen Fresh &Easy stores are in operation as of today in the Las Vegas and Henderson areas.

After the closed-store leases are dealt with, Tesco can auction the brand’s assets, and Yucaipa, through its affiliate YFE Holdings Inc., can bid for Fresh &Easy in a November court auction.

Since the deal between Burkle and Tesco was announced over the summer, rumors have been swirling that the move is part of a greater plan to relaunch Wild Oats Market, a health food-focused chain that closed in 2007.

Wild Oats recently started manufacturing its private-label products again with items such as crackers, broth and pasta sauce.

“I’m sure (Burkle will) probably turn some of the better locations that have the right demographics into Wild Oats,” said supermarket analyst David Livingston. “He won’t do all of them. A lot of stores will go dark, and others will be sold for other purposes.”