Large American Company Files Bankruptcy
The cupcake chain, Crumbs Bake Shop, was forced to shut down its operations this past July after several years of dwindling sales, and rising debt. Crumbs filed for Chapter 11 bankruptcy protection and was recently looking to hold an auction to see if anyone was willing to make a bid to buy the company. This past week a bid was made by television personality Marcus Lemonis and Dippin’ Dots owner Fischer Enterprises. Lemonis and Fischer Enterprises’ bid of $6.5 million dollars was unmatched and eventually accepted. The auction was deemed unnecessary because no other investors came forward with a bid of their own. Suppliers for Crumbs Bake Shop and landlords of closed locations are looking to receive around $870,000 dollars to settle debts, according to court documents.
A group of landlords have expressed concerns about the viability of a Crumbs revival, and have since objected to the sale, according to court filings. A Crumbs bankruptcy attorney was reported as saying he had hoped any objections could be resolved by the end of the next hearing.
Judge Michael Kaplan, who is overseeing the Crumbs transfer, recently signed off on the sale to Lemonis and Fischer, which includes a cancellation of some of the debt owed.
After granting approval of the Crumbs sale, Judge Michael Kaplan had this to say about several of the Crumbs locations reopening, “The court is pleased to see there will be employees going back to work, and that there will be certain landlords with continuing tenants.”
Crumbs opened shop in 2003, and had several years of solid growth, before seeing its profits dwindle after going public in 2011. Crumbs had the most success selling frosting-laden cupcakes in a variety of flavors that included red velvet and cookie dough. Marcus Lemonis was reported as saying the new Crumbs will expand its menu, selling not only cupcakes, but coffee and sweets as well.
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