Crumbs Bake Shop, Inc. ("Crumbs")(OTC Pink:CRMB), a New York based cupcake specialty store chain, today announced that the U.S. Bankruptcy Court for the District of New Jersey has approved all of the First Day Motions related to its voluntary Chapter 11 process initiated July 11, 2014 and outlined bid procedures that the Company will ask the Court to approve in connection with a Court-supervised auction process under Section 363 of the Bankruptcy Code.
“This is an important milestone in the Chapter 11 process, and we thank the Court for its careful consideration of our requests,” said Edward M. Slezak, Crumbs Chief Executive Officer and General Counsel. “We are confident that Crumbs is taking the right steps to protect the brand and position the Company for long-term success. We are evaluating the Company’s retail strategy with the goal of reopening select Crumbs locations. Further, we intend to take time during this process to continue the strategy our team had put in place in the past year focused on licensing and franchising opportunities, given the success we had in signing new licensees for our baked goods, as well as introducing new products including Crumbs branded bake mix, bakeware, coffee and gourmet popcorn.”
Mr. Slezak continued, “After carefully evaluating opportunities to strengthen Crumbs’ financial position, we continue to believe that pursuing a sale transaction through this process will ensure a strong future for the Crumbs brand and business. By evaluating all offers for Crumbs through a Court-supervised auction process, we can be sure we are achieving the best possible outcome for the business and our stakeholders.”
The First Day motions approved by the Court collectively will enable Crumbs to maintain current operations as it pursues a sale through the Chapter 11 process. Among the approved motions, the Court granted Crumbs access to debtor in-possession (“DIP”) financing from Lemonis Fischer Acquisition Company, LLC, a joint venture created by Marcus Lemonis LLC and Fischer Enterprises, L.L.C., to help ensure the Company is able to continue meeting its financial obligations throughout the Chapter 11 case. The Court also approved motions giving Crumbs authority to, among other things, pay employee wages and benefits as usual throughout the Chapter 11 process. Additionally, Crumbs was granted approval to close certain retail locations.