Crumbs Bake Shop was granted permission to sell itself to Lemonis-Fischer Enterprises in a New Jersey bankruptcy court on Tuesday, August 26th.
Judge Michael Kaplan approved the sale of the famed cupcake chain to Marcus Lemonis, star of CNBC’s “The Profit,” and Fischer Enterprises, which is best known as the owner of frozen treat Dippin’ Dots. The purchase will successfully conclude Crumbs’ Chapter 11 bankruptcy case, annulling $6.5 million in debt, according to the Wall Street Journal.
Crumbs closed all 49 of its locations nationwide in July. About half of those locations will remain closed, but new ownership intends to reopen stores in cities such as New York, Chicago, Washington D.C., Boston and Los Angeles.
Scott Fischer, chief operating officer of Fischer Enterprises, states the stores will still focus on Crumbs’ famed cupcakes, but there are plans to integrate other food brands owned by the Oklahoma based investment company, such as ice cream and popcorn.
Crumbs began searching for a buyer in late 2013, but a $5 million investment from Fischer Enterprises in January 2014 temporarily halted the search. Filings show the company resumed hunting in May after an “out of court restructuring failed to take hold,” as stated by The Wall Street Journal.
Unsecured creditors of the company now have little options for recovery of money. However, it is possible a creditor committee could attempt lawsuits against unspecified parties in an effort to recoup their losses.
CEO Edward Slezak is slated to maintain his position through the end of the year. Crumbs also expects to rehire previous employees who lost their jobs in the July closings.
"The court is pleased to see there will be employees going back to work, and that there will be certain landlords with continuing tenants," said Judge Kaplan.
Crumbs opened its doors in 2003 in a small shop on the Upper West Side of Manhattan. Jason and Mia Bauer, husband and wife entrepreneurs, quickly expanded their line of signature cupcakes throughout the continental U.S. with up to 79 stores.
After a rapid growth, the company went public in 2011 and soon faced hardship after years of losses and a decline in capital.