BRATTLEBORO — More than 90 employees at Vermont Bread Company on Cotton Mill Hill are without jobs today, according to a notice filed with the Vermont Department of Labor.
“In accordance with any obligations under the federal Worker Adjustment and Retraining Notification Act this letter is to inform you that Koffee Kup Bakery, Inc. and its subsidiary Vermont Bread Company ... has announced that it will be terminating all operations, effective April 26, 2021,” wrote Jeff Sands in the notice.
Sands is the senior advisor in North America for American Industrial Acquisition Corporation, which acquired a majority of the shares of Koffee Kup on April 1.
The Reformer received information Monday morning from an employee that when he showed up for work he was told to go home because the facility was closed.
Sands wrote in the notice that Koffee Kup has been operating at a loss for some time and has been in default “of certain terms and conditions of its outstanding loans with its lenders.”
“The lenders had allowed the company to continue operating pursuant to a forbearance agreement that has expired,” wrote Sands.
Sands wrote that Koffee Kup had undertaken “very substantial efforts” to obtain additional financing or investors and has had many discussions and negotiations with lenders aimed at sustaining operations.
“However, none of these investors have made an offer acceptable to the senior lender and they have declined to further extend the forbearance agreement and declined to loan any additional funds to the company,” wrote Sands. “Because of this, continuing operations is no longer commercially reasonable or prudent.”
Last Thursday, wrote Sands, Koffee Kup received default notices from its lender, demanding immediate payment of outstanding loans, asserting its rights to take possession of the company’s assets and confirming that it would no longer extend credit to cover operating costs of the company including payroll.
“Therefore, although many promising avenues were explored that we were cautiously optimistic would have allowed Koffee Kup to survive, those efforts have now been exhausted without success and Koffee Kup no longer has sufficient capital to continue operations,” wrote Sands.
Sands noted he was unable to provide an earlier notice to the state “as we were uncertain of the success of the efforts that we have been making to continue operating. Earlier notice of this unfortunate outcome would have been premature and would have jeopardized those very efforts.”
The Reformer reached out to Sands and a local representative of Koffee Kup but did not receive a response by press time.
According to a news release issued earlier this month by G2 Capital Advisors, Koffee Kup was looking for “the optimal partner to support the Company’s long-term growth strategy.”
G2 Capital Advisors provides advisory services in mergers and acquisitions and capital markets. According to the news release, American Industrial Acquisition Corporation invests in the manufacturing, aerospace, automotive, truck, rail, appliance, power generation, mining, oil and gas, packaging, pulp and paper, medical equipment and pharmaceutical sectors, according to its website.
“The Company is in the process of repositioning its business to capitalize on a compelling platform of established brands, private label partnerships, long-term relationships with blue-chip retailers, and a vast distribution network,” states the news release.
A spokesperson from G2 declined the opportunity to comment.
Koffee Kup Bakery was one of largest employers in the state of Vermont, with 500 employees in Brattleboro, Burlington and North Grosvenor Dale, Conn. WCAX reported that the Burlington Bakery is closed but the Reformer has not received information on whether the Connecticut plant was also closed.
Koffee Kup Bakery got its start in 1925 in Troy, when Cherie Roberge opened a small bakery, making bread and rolls which he delivered to local stores via horse-drawn wagon. In 2013, Koffee Kup purchased Vermont Bread Company from Charter Baking, a New York-based private equity firm that bought the the company in 2005 from founder Lisa Lorimer. She started the bakery in 1978 in an 800-square-foot barn in Guilford with a pizza oven and a home-sized mixer.
Vermont Bread Company’s bakery is located in the Cotton Mill, a renovated mill building that houses more than 60 businesses and artists’ studios.