Smucker buys Havre de Grace bottler

December 02, 1992|By Frank Lynch | Frank Lynch,Staff Writer

The Chesapeake Beverage Corp., closed since Oct. 30 and being liquidated under a Chapter 7 bankruptcy filing, has been sold to the J. M. Smucker Co. and is scheduled to reopen next month, the court-appointed trustee said yesterday.

Joel I. Sher, a lawyer at the Baltimore law firm of Shapiro & Olander, said in papers filed yesterday with the federal bankruptcy court in Baltimore that he approved Smucker's $2.5 million bid to buy the Havre de Grace bottling plant.

Chesapeake creditors can challenge the sale anytime within the next 20 days. If an objection is raised, a court hearing would be held Jan. 12.

Alan McFall, vice president of corporate development and planning for Orrville, Ohio-based Smucker, said yesterday that the company hoped to reopen the plant by mid-January. He said the plant would reopen as a bottler of Smucker products only.

"Since many contract bottlers are having similar difficulties experienced by Chesapeake, we felt it was to our advantage to operate our oun plant," he said. "It allows us total control of our product."

Smucker, founded in 1897, operates plants in Orrville and in Salinas, Calif., Memphis, Tenn., and Ripon, Wis. The company, which makes jams and jellies, had sales of $483 million last year.

One of the products bottled by Chesapeake during the past year was Spritzer, a carbonated drink made by Knudsen, a subsidiary of Smucker in Chico, Calif. Knudsen's line of non-carbonated fruit blends would be bottled at the 68,000-square-foot plant.

"Right now, our plans call for Knudsen products to be bottled in Havre de Grace," Mr. McFall said. "We have been marketing Knudsen products on the East Coast and now we'll have the logistical capability to get it to the retailer much quicker."

He said that Smucker purchased only Chesapeake's assets, not its liabilities. "We are under no obligation to any of the creditors," Mr. McFall said.

Chesapeake sought protection from creditors in June 1991 after a plan to merge the company with a bottling firm in Oklahoma was put on hold. At the time, the company listed $4.25 million in assets and $6.3 million in liabilities.

When Chesapeake closed, it had about 110 employees. Mr. McFall said Smucker hopes to eventually hire as many or even more workers than Chesapeake had at its closing, but he did not want to commit to a specific figure early on.

Smucker would not have to negotiate a contract with United Food and Commercial Workers Union Local 27, which represented the former Chesapeake employees. Joel Smith, a lawyer for Local 27, was not available for comment yesterday.

Officials in Harford County said they were pleased the plant would be reopened.

"This is very, very good news," said County Executive Eileen M. Rehrmann.

"I'm simply delighted to hear that a quality company such as Smucker will be operating in our county. We are all looking forward to working with such an outstanding organization."

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