Crumbs Bake Shop, Inc. ("Crumbs")(OTC Pink:CRMB), a New York based
cupcake specialty store chain, today announced that the U.S. Bankruptcy
Court for the District of New Jersey has approved all of the First Day
Motions related to its voluntary Chapter 11 process initiated July 11,
2014 and outlined bid procedures that the Company will ask the Court to
approve in connection with a Court-supervised auction process under
Section 363 of the Bankruptcy Code.
“This is an important milestone in the Chapter 11 process, and we thank
the Court for its careful consideration of our requests,” said Edward M.
Slezak, Crumbs Chief Executive Officer and General Counsel. “We are
confident that Crumbs is taking the right steps to protect the brand and
position the Company for long-term success. We are evaluating the
Company’s retail strategy with the goal of reopening select Crumbs
locations. Further, we intend to take time during this process to
continue the strategy our team had put in place in the past year focused
on licensing and franchising opportunities, given the success we had in
signing new licensees for our baked goods, as well as introducing new
products including Crumbs branded bake mix, bakeware, coffee and gourmet
popcorn.”
Mr. Slezak continued, “After carefully evaluating opportunities to
strengthen Crumbs’ financial position, we continue to believe that
pursuing a sale transaction through this process will ensure a strong
future for the Crumbs brand and business. By evaluating all offers for
Crumbs through a Court-supervised auction process, we can be sure we are
achieving the best possible outcome for the business and our
stakeholders.”
The First Day motions approved by the Court collectively will enable
Crumbs to maintain current operations as it pursues a sale through the
Chapter 11 process. Among the approved motions, the Court granted Crumbs
access to debtor in-possession (“DIP”) financing from Lemonis Fischer
Acquisition Company, LLC, a joint venture created by Marcus Lemonis LLC
and Fischer Enterprises, L.L.C., to help ensure the Company is able to
continue meeting its financial obligations throughout the Chapter 11
case. The Court also approved motions giving Crumbs authority to, among
other things, pay employee wages and benefits as usual throughout the
Chapter 11 process. Additionally, Crumbs was granted approval to close
certain retail locations.
The Company also today outlined the sale transaction timeline that it
will formally present to the Court on July 24, 2014, including proposed
bid procedures and an expected date for an auction and sale hearing that
will determine the best offer to acquire substantially all of Crumbs
assets. As part of the Chapter 11 process, other potential buyers will
have the opportunity to submit bids to acquire Crumbs, with Crumbs set
to ask the Court to approve a bid deadline of August 19, 2014. If other
qualified bids are received ahead of the deadline, those will be
evaluated by Crumbs, its advisors and the Court in a Court-defined
“auction” process. This auction process is required for sale
transactions completed through a Chapter 11 case to ensure the maximum
value is achieved.
Crumbs previously announced July 11, 2014 that it had filed voluntary
Chapter 11 petitions in the United States Bankruptcy Court for the
District of New Jersey to facilitate a sale of the business and to
restructure its balance sheet. The Company reached an agreement for
Lemonis Fischer Acquisition Company to provide an initial stalking horse
bid in the Court-supervised auction process under Section 363 of the
Bankruptcy Code. The Company hopes to complete the sale process in
approximately 60 days, pending receipt of the necessary approvals from
the Bankruptcy Court.
Interested parties can access additional information about the Company’s
chapter 11 filing and sale process at http://cases.primeclerk.com/crumbs.
About Crumbs
The first Crumbs bake shop opened in March 2003 on the Upper West Side
of Manhattan and is well known for its innovative and oversized gourmet
cupcakes.
Copyright Business Wire 2014