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BRATTLEBORO — The dissolution receiver who was appointed to disburse the remaining funds left over after Koffee Kup closed in April doesn’t understand why the process has taken this long.

“This whole issue has been a fight over paid time off,” said Linda Joy Sullivan, of Dorset, who was appointed by the Chittenden Superior Court to take over the dissolution of Koffee Kup’s assets after KeyBank was awarded the $7.6 million it was owed.

“The only people who are benefitting right now are the attorneys. The bottom line is we should finish this. It would be harmful to the estate to let this go to bankruptcy.”

On April 26, about 440 employees of Koffee Kup, including about 100 at its affiliate, Vermont Bread Company in Brattleboro, arrived to work to find themselves locked out and without jobs. Though they received their final paychecks, they did not receive payment for their paid time off.

In early June, Flowers Foods, based in Georgia, purchased all of Koffee Kup assets — in Burlingtion, Vermont Bread in Brattleboro, and Superior Bakery in North Grosvenor Dale, Conn. — but stated it had no plans to reopen any of the bakeries at the time. Even though Flowers Foods recently purchased the real estate as well, the bakeries remain closed. A spokesman for Flowers Foods did not return a request for comment.

About that same time, Vermont Superior Court Judge Samuel Hoar told the receiver, Ronald Teplitsky, to release the paid-time-off balances owed the employees, but Teplitsky told the court he had a problem with the payroll processing company, and it was taking longer than expected. Three days before the PTO was to be disbursed, creditors filed an involuntary bankruptcy petition against Koffee Kup, freezing its assets. The move could have reduced the total of paid time off from $832,000 to about $12,000.

Following the filing, Justin Kolber, with the Vermont Attorney General’s Office, accused the creditors of attempting to “claw back” the employees’ PTO, and the attorney appointed to represent Koffee Kup’s assets, Alexandra Edelman, characterized the petition as “a blatantly bad faith attempt.”

“[T]he timing of the Petition appears calculated, suspicious, collusive and malicious given that it was filed on [Aug. 16] ... just one business day after the final portion of the sale of the [Koffee Kup] assets — the closing on the real estate — occurred, allowing for the release of a substantial amount of funds that were being held back until the sale was fully consummated, and just three business days before payment of the [paid-time-off] Obligation was scheduled,” wrote Edelman.

Neither Kolber nor Edelman responded to the Reformer’s request for comment.

In a ruling issued earlier this week, the federal bankruptcy judge ordered the release of the PTO balances, concluding because the state court had previously authorized the payments, they weren’t part of the bankruptcy proceeding.

“This has just been a milking frenzy,” said Sullivan.

An attorney for Teplitsky did not return a request for comment.

On Friday, the Reformer was contacted by a former Vermont Bread Company employee who said some employees are getting their paid-time-off checks, while others are not.

The employee, whose identity is being kept confidential, was familiar with employee records. Sullivan confirmed the employee’s position at Vermont Bread.

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“Employees of Vermont Bread Company are receiving either nothing or incorrect payment, and that is because the receiver who is in charge of the payment does not have the records from Vermont Bread company and refuses to listen to us,” said the employee.

A second former employee, who also asked not to be identified by the Reformer, confirmed the first employee’s accounting.

“Some got what they were owed, others have gotten nothing yet, others got something but it was wrong,” said the source.

Sullivan said she has also been hearing from former employees about problems with the checks they are getting from Teplitsky.

“I am communicating these errors,” she said. “We will figure it out. I am confident the KeyBank receiver and myself will figure out a way to resolve these issues.

But Sullivan also told the Reformer that it’s incomprehensible to her that the paid-time-off issue has not yet been resolved.

“I’ve been saying this from day one,” she said. “These delays weren’t necessary. We’ve been ready, just waiting for the final report [from Teplitsky] but he keeps delaying. We were ready four weeks ago.”

Sullivan also noted that she has not had any issues with the payroll processing firm that Teplitsky said caused the delay.

“They have been willing to work with us,” she said.

Sullivan told the Reformer the whole process has been a little too murky for her liking.

“All receiverships should be transparent,” she said.

When Teplitsky issues his final report, all records will be turned over to Sullivan, who said the federal court should toss the involuntary bankruptcy petition.

Sullivan said once Teplitsky issues his final report and she receives all the documents, she will proceed rapidly with the dissolution to make sure all the creditors receive what they are owed.

She also noted that she will learn exactly what Flowers Foods paid for Koffee Kup, and she is not bound by the confidentiality agreement that prevented Teplitsky from revealing the amount.

Bob Audette can be contacted at