A Chittenden Superior Court has appointed state Rep. Linda Joy Sullivan of Dorset to help dissolve the former Koffee Kup Bakery’s remaining assets.
Koffee Kup, which owned the Vermont Bread Co. facility in Brattleboro and bakeries in Burlington and North Grosvenor Dale, Conn., shut down in late April. A receiver was appointed to sell the company, and it was purchased by Flowers Foods of Georgia.
While that sale provided the company’s former workers with paid time off they were owed, Flowers Foods has no immediate plans to reopen the bakeries.
In her role, Sullivan was appointed to act as receiver “with respect to the dissolution and wind up of the Koffee Kup entities and distribution of the surplus assets, tangible or intangible.” That includes cash proceeds from the sale of assets to Flowers Foods, and remaining assets “including accounts receivable, causes of action and other claims of any of the Koffee Kup Entities against third parties.”
“We look forward to serving the court in the difficult circumstances surrounding the break up and dissolution of these renowned and cherished Vermont businesses. We were just appointed today, and so we have some catching up to do,” Sullivan said Wednesday. “We can say, though, that we are thoroughly committed to an orderly and transparent process and want to thank the predecessor receiver for his service in this case.”
It’s the second new job for Sullivan in a week. She announced Sunday that she was appointed to the Vermont Judiciary’s Professional Responsibility Board’s Assistance Panel. That panel reviews complaints referred to it by bar or disciplinary counsel, and provides resolution by means other than discipline.
According to the order, Sullivan may take “all actions she deems reasonable and appropriate” to prevent waste of surplus assets and “preserve, secure, manage, maintain and safeguard” those assets.
Sullivan is also authorized to charter a third party appraisal to determine the value of the remaining assets, and “effectuate the proper allocation of the surplus assets to each of the Koffee Kup entities for application to claims” in accordance with the law.
The appointment follows the June 8 sale of the entities to KKB Acquisition LLC, an affiliate of Flowers Foods, which is anticipated to cover debts including former employees’ accrued paid time off obligations that had been in limbo during proceedings. A different receiver, Ronald Teplitsky, was appointed for the sale process.
Sullivan “has extensive experience as a court appointed receiver, examiner and CPA, including serving as a court appointed receiver in various matters in Vermont and Florida, and a court appointed examiner, CPA and consultant in various bankruptcy matters litigations and IRS disputes,” the order states, adding that Sullivan will be assisted by her business partner Heber C. Maughan.
Hourly rates will be $250 for Sullivan and $200 for Maughan, according to the order. Their role is defined to include dissolving each entity, determining unsecured creditors and the share of surplus assets that should go to each entity once other costs are settled, and distributing the assets to creditors.
On April 26, about 500 employees at Koffee Kup in Burlington, Vermont Bread Company in Brattleboro and Superior Baking in North Grosvenor Dale, Conn., arrived at work to discover they no longer had jobs. Employees received their final paychecks, but money deposited along with those checks for paid-time-off balances was rescinded, creating financial problems for many employees.
According to court documents filed at Chittenden Superior Court, Civil Division, the employees are owed $812,000 in paid time off, as well as $16,000 in interest.
Flowers Foods is based in Georgia and operates a distribution facility in Brattleboro for Country Kitchen and other products. Although Flowers Foods supported paying the former employees the rest of their money, the company has said it has no plans to resume operations at the three bakeries.
The purchase price has been kept confidential. But additional creditors are seeking payments, including $600,000 for Bernadino’s Bakery, $500,000 for Ryder Truck Rental, $660,000 for Lily Transportation, and $275,000 for Eastern Packaging.
Teplitsky has to complete the sale to Flowers Foods, which is expected within the next two weeks, said Justin Heller, an attorney for Teplitsky. Then Teplitsky will file a final report with the court, after which Heller anticipates his receivership will be concluded.
“He will not be assisting the new receiver in the long run, but will be assisting to ensure a smooth transition,” Heller said.
Darren Marcy and Greg Sukiennik contributed to this report.