Despite all the negative reports, it appears the popular gourmet cupcakes chain Crumbs Bake Shop may not be permanently closing its doors after all.
Several days after shutting down its remaining stores and indicating that it would file for Chapter 7 liquidation, Crumbs instead filed for protection under the reorganization provisions of Chapter 11 of the bankruptcy law, according to The Wall Street Journal. The chain will sell itself to an investor group that includes CNBC host Marcus Lemonis and Dippin’ Dots owner Fischer Enterprises. The group said that it plans to provide the ailing chain with financing to carry it through its time in bankruptcy court and then to acquire its assets in order to create a new, privately held company.
“The company has limited cash, and we are trying to come up with a situation that allows the company to remain viable,” Lemonis told The LA Times. “We are in the final stages of working on a plan to get the stores reopened and people rehired.”
Lemonis explained the investor group’s thinking, suggesting that Crumbs’ downfall was selling only one dessert, according to the news source. Under new leadership, the chain will offer other sweets and bulk up its coffee offering. His own Florida-based candy chain, Sweet Pete’s Candy, will join a number of other brands in being incorporated into the new Crumbs.
In one bit of good news for the investors, the company’s reported net sales in 2013 came to $47.2 million – up from 2012’s figure of $43 million, according to the Journal.
After news broke that Crumbs may be acquired by the investor group, the company’s stock shot back up 990 percent, from 3 cents to 35 cents, according to the LA Times.
The struggle for Crumbs to remain open, reminds me of another desert company that had bouts with bankruptcy. Check out my recent posts on Hostess, the company that brought you the Twinkie and the Ding Dong:
Hostess Brands Inc. Bankruptcy Posed Risk To Other Pensions
Judge Ordered Mediation Between Hostess and Union Fails
Hostess Brands To Shut Its Doors
Hostess Seeks Court Order to Impose New Contract on Union
A Whistleblower Just Filed a Complaint Against Your Company: Here's What to Do Now
Few situations create more uncertainty than learning that an employee has filed a whistleblower complaint. Questions arise immediately: Is the allegation legitimate? Should the employee be placed on leave? Do we need to notify our insurance carrier? Are we now prevented from disciplining the employee if there are unrelated ongoing work related issues? There is […]
Assignment for the Benefit of Creditors: An Alternative to Bankruptcy for Distressed Businesses
When a business reaches the point where it can no longer service its debts or otherwise resolve its liabilities, management is often faced with a difficult question: is a bankruptcy filing necessary or is there another way to perform an orderly liquidation or sale of the business assets? While Chapters 7 and 11 of the […]
Breaking Down New Jersey’s “Mansion” Tax: What Buyers and Sellers Need to Know
For many years, the New Jersey Mansion Tax has been a significant consideration in high-value real estate transactions. Recent legislative changes, however, have substantially altered how the tax operates, including who is responsible for paying it and the amount owed in certain transactions. Whether you are purchasing, selling, or investing in New Jersey real estate, […]
Estate Planning for Digital Assets Under New Jersey Law
As our personal and financial lives increasingly move online, estate planning must evolve to address a new category of property: digital assets. From email accounts and social media profiles to cryptocurrency and cloud-stored business records, these assets often carry both financial and sentimental value. Yet, without proper planning, they can become inaccessible—or even lost—upon incapacity […]
The Role of Representation and Warranty Insurance in M&A Transactions
In today’s mergers and acquisitions market, representation and warranty (R&W) insurance has become a common feature of deal negotiations. Once used primarily in larger transactions, R&W insurance is now frequently incorporated into middle-market deals as buyers and sellers look for efficient ways to allocate risk and close deals. When structured properly, R&W insurance can help […]
You Just Received a Federal Grand Jury Subpoena in New Jersey: Now What?
Receiving a federal grand jury subpoena is not something most businesses or individuals anticipate. While it can be concerning, a federal grand jury subpoena does not necessarily mean that you are being accused of wrongdoing. It does, however, mean that a federal criminal investigation is underway and that federal prosecutors believe you may possess information […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
