Fresh & Easy files for Chapter 11

The Wall Street Journal reported on its website that Fresh & Easy Neighborhood Market, El Segundo, Calif., filed for Chapter 11 bankruptcy protection to sell many of its stores to Los Angeles-based private investment firm The Yucaipa Companies LLC, listing a debt of as much as $1 billion and assets of as much as $500 million. According to the newspaper, the retailer said in its court papers that it would seek to hold an auction on Nov. 11, at which a Yucaipa affiliate would lead the bidding with the investment firm’s offer to buy roughly 150 of the retailer’s 167 stores.

Under the proposed deal, a Tesco affiliate would loan the Yucaipa affiliate $120 million to help fund the takeover, noted Bloomberg.com. Tesco would get warrants to purchase as much as 10 percent of the reorganized supermarket chain’s equity.