For some companies that go through the Chapter 11 bankruptcy process, it is the only time when the company really needs to focus on an overhaul, change a business model and get back to the business of profitability. For others, however, going through Chapter 11 bankruptcy is no guarantee of turning things around.
According to a recent report, Fresh & Easy Neighborhood Market Inc., which just went through a Chapter 11 filing two years ago, is now filing for bankruptcy again. The company, a grocery store chain based in nearby El Segundo, was bought out in the prior bankruptcy proceeding by billionaire Ron Burkle. It appears that Burkle's aim was to make some big changes with the company, with the hopes of turning out a profit once again. Now, with the news of this second bankruptcy filing in two years, it appears that those hopes did not pan out.
The reports indicate that the company will shut down all remaining stores - there are about 100 of them - and the company reportedly hopes to gain approval for a pre-brokered deal to sell assets and inventory. The most recent bankruptcy filing indicated that the company has liabilities of approximately $500 million.
This recent news about Fresh & Easy Neighborhood Market Inc. is a prime example of the fact that not every company can turn things around by filing for Chapter 11 bankruptcy. The companies that are most successful in going through this process and bouncing back have a well thought out plan and attack it aggressively.
Source: Bloomberg.com, "Even Burkle Can't Save Grocer as Fresh & Easy Falls Again," Dawn McCarty and Tiffany Kary, Oct. 30, 2015