US grocer Safeway has said it has counter-sued Yucaipa, which failed to acquire Safeway’s Dominick’s chain, claiming the private investment firm breached a pre-deal agreement.

California-based Safeway said it had filed the suit against Yucaipa on Wednesday in response to Yucaipa’s 4 August lawsuit, which claimed that Safeway had not considered its bid for Dominick’s in good faith, but had instead tried to use it to reach collective bargaining agreements with unions at the chain, reported Reuters.

Safeway said it is counter-suing Yucaipa for “breach of contract, fraud and intentional interference” in its attempt to sell Dominick’s.

Safeway claims that Yucaipa tried to reach an agreement with Dominick’s unions before entering the bidding process, something Safeway said it asked bidders not to do. The grocer also claims Yucaipa went back on an agreement to withdraw its interest if another bidder was selected as the winner.

Safeway but Dominick’s up for sale last November, because of falling sales and profitability.