Nonprofit, Award-Winning Community News and Views for Windham County, Vermont • Since 2006
News

Receiver sells bakery assets to Georgia firm

Would-be buyers can petition court to stop sale; Vermont Bread workers may get back pay, but their jobs are in limbo

BRATTLEBORO—There was plenty of jubilation after the May 27 news that a family-owned Canadian baker is buying the recently closed Koffee Kup Bakery of Burlington and its subsidiaries, Vermont Bread Company of Brattleboro and Superior Baking in North Grosvenor Dale, Conn.

But that jubilation, and the hope of a quick reopening of the bakeries, turned out to be short-lived.

On June 7, during a hearing in Chittenden Superior Court regarding a lawsuit brought against the bakery by its chief creditor, Key Bank, the court learned that Georgia-based Flowers Foods had acquired all the assets of Koffee Kup from court-appointed receiver Ronald Teplitsky, who was appointed to sell Koffee Kup’s assets to settle the bank’s interest.

In a scheduling/entry order, Judge Samuel Hoar wrote that Teplitsky “has consummated [an] agreement to sell collateral for an undisclosed sum, which is sufficient to satisfy all creditor claims.”

Financial terms of the transaction were not disclosed, but Justin Heller, an attorney for Teplitsky, said the deal means that 150 Koffee Kup workers in Burlington and 100 Vermont Bread workers in Brattleboro who were thrown out of work on April 26 without warning or explanation will ultimately receive the back pay they are owed.

However, Flowers Foods has not indicated when, or if, operations at Koffee Kup or Vermont Bread will resume.

“This acquisition brings brands and production capacity in the Northeast, a key growth market for our company,” Flowers Foods president and CEO Ryals McMullian said in a June 7 news release.

“The Koffee Kup and Vermont Bread Company brands have a strong consumer following in the region,” he continued, “and we’ll be evaluating their role within our brand portfolio. We have no immediate plans to reopen the bakeries, but will be assessing how they may fit our strategic network optimization efforts in the future.”

Flowers Foods, a publicly traded company based in Thomasville, Ga., is one of the largest commercial bakers in the United States, with annual sales of $4.4 billion. Among its top brands are Nature’s Own, Dave’s Killer Bread, Wonder, Canyon Bakehouse, and Tastykake.

It’s not the first time that Flowers Foods has taken control of a Brattleboro bakery.

In 2012, Flowers Foods bought Maine-based Lepage Bakeries, whose assets included the Country Kitchen bakery at the Exit One Industrial Park. The 70,000-square-foot bakery had operated in town since 1992.

In January 2019, Flowers closed the bakery, putting 60 people out of work.

Two bakeries had made overtures to acquire the assets of the shuttered company and its bakeries. They can both make a motion to void the sale by June 22, the date of the next scheduled hearing in Chittenden Superior Court.

Mrs. Dunster’s Bakery, a Sussex, New Brunswick–based company, had apparently received the OK to buy Koffee Kup. East Baking Company of Holyoke, Mass. had been the apparent buyer until the Mrs. Dunster’s bid was approved.

American Industrial Acquisition Corporation (AIAC), a New York-based investment firm, bought a majority interest in Koffee Kup on April 1 and agreed to provide up to $2.5 million in financial support.

Instead, AIAC abruptly shut down operations on April 26.

AIAC claimed that Koffee Kup had “suffered substantial financial losses” for the previous four years “and was unable to find a way out of their troubles.”

Like what we do? Help us keep doing it!

We rely on the donations and financial support of our readers to help make The Commons available to all. Please join us today.

Originally published in The Commons issue #616 (Wednesday, June 9, 2021). This story appeared on page A1.

Share this story

Links

0

Related stories

More by Randolph T. Holhut