A courtroom clash between failed supermarket operator Fresh & Easy LLC and its creditors appeared headed for mediation yesterday, but the overall direction of the company's chapter 11 case was clouded by looming legal battles with former employees, Dow Jones Daily Bankruptcy Review reported today. Appearing before Bankruptcy Judge Brendan Shannon, lawyers for Fresh & Easy tackled a number of roadblocks that threaten to drag out the bankruptcy proceeding and run up legal bills. The grocer's unsecured creditors are seeking greater access to information about the company's past business transactions, including the alleged transfer of at least $40 million in real-estate assets from Fresh & Easy to an affiliate of its private-equity backer Yucaipa Cos. But uncovering that information could be costly for the company, as could any future lawsuits it might trigger. Lawyers for Fresh & Easy and the judge said they hoped to avoid "bogging down" the case and to work toward a settlement that would put the dispute with unsecured creditors to rest.
