Jays Can't Stop the Bleeding, Files Chapter 11 Papers
By Chuck Sudo in Food on Oct 15, 2007 2:36PM
Things are tough all over, especially at Jays Foods. Last Thursday, the longtime local potato-chip king filed for Chapter 11 bankruptcy for the second time in four years, amid claims that the company is "struggling financially" and facing an "acute liquidity crisis caused, in part, by a sharp, unprecedented rise in commodity prices" including corn oil, fuel and packaging. Ubiquity Brands, Jays' parent company, claims $20 million in debt to unsecured non-bank creditors.
The bankruptcy filing comes months after Panera Bread removed Jays brand chips from their stores in favor of their own self-branded offerings. Panera accounted for roughly half of Jays' small-bag business. In April, Jays also announced that they were moving the production of some of their specialty snacks from their longtime home at 99th and Cottage Grove to a plant near the Indiana-Kentucky border. At the time of the bankruptcy filing Jays was in the process of selling a majority of their assets to Jay's Acquisition Inc. for $24.85 million. Sun-Times business reporter Sandra Guy wrote that the company behind Jay's Acquisition is supposedly pretzel king Snyder's of Hanover. However, the bankruptcy filing process requires that all assets go up for auction. Further adding insult to injury: Jays leases their Chicago production facilities. Should a new owner purchase Jays at auction, they might opt to move from the plant altogether.
Image via respublica.