PORTLAND, Ore. — The Federal Trade Commission on Monday asked a federal judge to halt the integration of Wild Oats and Whole Foods Market as part of an ongoing legal battle over the 2007 deal that combined the two natural grocery chains.
The FTC wants a U.S. District Court judge to force Whole Foods to stop any integration activities while one of multiple disputes over its acquisition of Wild Oats is handled in court.
If the judge finds the FTC has a strong enough case, the regulators say they could completely unwind the companies.
Federal regulators said in their filing that the request is "appropriate, and reasonable" to preserve the assets of Wild Oats until the conclusion of the hearings. The FTC said it would not comment further on pending litigation.
Whole Foods officials called the FTC's request "absurd" and said the process of integrating Wild Oats is done.
"They want us to put the toothpaste back in the tube," said Lanny Davis, an attorney representing Whole Foods. "How can you halt something that is already done?"
Whole Foods Market Inc. bought Wild Oats Markets Inc. of Boulder, Colo. for $565 million. The Austin, Texas-based company then spent millions more converting Wild Oats stores into Whole Foods sites and selling off others.
But the FTC's challenge, which began in 2007 before the acquisition closed, has left it in legal limbo.
The FTC has long argued the deal would create a natural-foods monopoly.
Whole Foods argues organic and natural foods are widely available from other sources, and it has said the process for reviewing the is deal flawed and even sued the FTC for violating its rights.
The U.S. District Court is expected to decide in coming months whether public interest demand a full-scale hearing. A separate antitrust hearing is scheduled later this year.
"First, they pronounce us guilty without one day in court of evidence," Davis said. "Now, they are demanding remedy before we even go to court."
The antitrust case has posed added challenges for Whole Foods as other grocers have tried to stay out of the legal battle.
Whole Foods lawyers are seeking information that would illustrate the grocer is not a monopoly, but many grocers are resisting sharing proprietary information.
Tuesday, Whole Foods plans to urge grocers to share their business practices, adding a legal nudge and asking the court to add a layer of protection to assure them Whole Foods will not see the information.
Whole Foods chief executive officer John Mackey also sent letters Monday that assure the grocers his company won't see it.