Gold Standard Baking files bankruptcy with plans to sell assets

By Sarah Lizee

Olympia, Wash., June 22 – Gold Standard Baking, LLC filed Chapter 11 bankruptcy Wednesday in the U.S. Bankruptcy Court for the District of Delaware.

Chief restructuring officer John T. Young, Jr. said a disruption in the company’s workforce, consistent maintenance and repair issues, increasing labor and material costs, and constraints on liquidity have considerably strained the debtors’ operations and business growth.

Young said the company has negotiated $1.5 million in debtor-in-possession financing that will allow it to continue to operate in the normal course, pay landlords and vendors, and have enough liquidity to pay the administrative costs required in the Chapter 11 process.

The company is seeking interim access to $500,000 of the facility, which is with prepetition lender 37 Baking Holdings, LLC.

The DIP facility is set to mature on Aug. 15 and bear interest at 12%.

The company is also seeking access to the cash collateral of 37 Baking Holdings and prepetition lender

Parallel49 Equity (Fund V), LP.

In April, 37 Baking Holdings acquired all the rights of the initial lenders under the company’s first-lien credit facility. The lender has also agreed to serve as stalking horse bidder for the company’s assets.

The stalking horse purchase price includes a credit bid against $20 million of the company’s first-lien debt, assumption of some liabilities, and assumption of contracts.

The agreement includes a $250,000 breakup fee and a $350,000 expense reimbursement.

The initial overbid has been set at an amount equal to the break-up fee, the expense reimbursement, and $200,000.

Under the proposed bid procedures, the bid deadline is 4 p.m. ET on July 25, the auction would take place on July 28, and the sale hearing would take place on Aug. 3.

The company is hoping to close the sale by Aug. 15.

The baking company has roughly $140 million outstanding under a revolving credit facility, the first-lien term loan, a second-lien term loan and senior subordinated notes.

In its petition, the company listed $100 million to $500 million in both assets and liabilities.

Its largest unsecured creditor is Audax Group, based in New York, with a $35.47 million senior subordinated notes claim, and Parallel49 Equity, based in Lake Forest, Ill., with a $16.31 million second-lien term loan claim.

The company is represented by Klehr Harrison Harvey Branzburg LLP.

The Chicago-based industrial baker filed Chapter 11 bankruptcy under case number 22-10559.

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