Gold Standard Baking files for Chapter 11 to pursue sale – Reuters

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(Reuters) – Gold Standard Baking LLC, which supplies frozen croissants and other baked goods to restaurants and grocery stores across the United States, filed for bankruptcy protection in Delaware on Wednesday to pursue a sale.
The company cited worker shortages, high debt and rising material costs among the reasons for its financial troubles.
The privately held company has $140 million in secured debt, and it will seek to close a sale by August 2022, according to documents filed in Delaware bankruptcy court.
If it is unable to find an outside buyer, Gold Standard would transfer its assets to a new company formed by high-ranking employees of Gold Standard, including its CEO, and investors and an employee of its current private equity owner, Parallel49 Equity. The new company acquired Gold Standard's senior debt before the bankruptcy filing, and also agreed to provide the company a $1.5 million bankruptcy loan.
Based in Chicago, Illinois, Gold Standard is one of the largest commercial bakeries in the U.S., producing more than 1.7 million pounds of baked goods per week, according to a court filing. Croissants account for about half of the company’s sales, and Gold Standard also specializes in danishes and cinnamon rolls, according to court documents.
The company blamed the COVID-19 pandemic for exacerbating existing staffing challenges, saying that workforce shortages left it unable to grow revenue.
Gold Standard defaulted on its loans in 2020, and has been unable to make scheduled principal and interest payments.
The company was already struggling before the pandemic to maintain a qualified work force after disruption caused by a 2017 Internal Revenue Service review. The company fired about 230 skilled workers after the IRS highlighted discrepancies in the employees’ reported Social Security numbers, according to court documents.
Gold Standard currently has 333 full-time employees.
The company previously operated a second bakery in Wisconsin, but it sold that facility for an undisclosed price to Crown Bakeries in December 2021.
The case is In re Gold Standard Baking LLC, U.S. Bankruptcy Court for the District of Delaware, No. 22-10559.
For Gold Standard: Domenic Pacitti and Michael Yurkewicz of Klehr Harrison Harvey Branzburg
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