A sweet business is hurting after an account goes sour

Ms. Desserts owner, itself in Chapter 11, is seeking a buyer

November 06, 2001|By Kristine Henry | Kristine Henry,SUN STAFF

A major food distributor's bankruptcy has left the proprietors of Ms. Desserts in Woodlawn searching for a new owner, and left its employees hoping whoever takes over will keep them on the payroll.

The company, owned by Bakery Resources Group LLC, has been churning out cakes, pies and other treats since 1978, when founder Deane Hochman started the business out of her home. She sold it in 1989 to a Canadian firm, and Bakery Resources, owned by Alvin Powers and Leonard Attman, bought it in March 1997.

Some of Ms. Desserts' products can be purchased at retailers such as Giant Food Inc., but they are largely found in the kitchens of restaurants and cafeterias.

Business was fine, the company says, until one of its major distributors, Dallas-based AmeriServe Food Distribution Inc., filed for Chapter 11 in January of last year. The filing allowed AmeriServe to bail out on the payment of $400,000 owed to Ms. Desserts, said Robert J. Barry, chief executive of Bakery Resources Group.

To make matters worse, Barry said, the bankruptcy court also ordered companies that AmeriServe had paid in the three months before the filing to return the money so it could be redistributed among creditors. That meant Ms. Desserts had to cough up $500,000 it already had been paid.

"If it wasn't for the AmeriServe issues, things would be rolling right along," Barry said. "It just trickles down."

It trickled all the way down to the point that Bakery Resources, which does about $10 million in sales each year, filed for Chapter 11 protection in May. It is hoping to use proceeds from the sale of Ms. Desserts and its two other companies - Take the Cake and Arctic Dough - to pay off a secured creditor.

Bakery Resources, which employs about 85 people - including 65 Teamsters - in its production area, will accept sealed offers for the company through Nov. 27. Barry said at least five parties have expressed interest, although he is not sure if they all will make bids for the company.

Barry said the company will be sold as a going concern, but there is no guarantee that a new owner would keep the company running as is. The contract with the union was set to expire in December, but the Teamsters agreed to extend it through the end of February. Workers at the plant, off Rolling Road, start at about $6.60 an hour, according to the union, and can earn more than $17 an hour.

Oscar Heinonen of Canton began working at Ms. Desserts 21 years ago at age 20. He's a mechanic there now, but says he has held just about every hourly job the company has.

"I'm nervous, I'd like to get this over with," he said yesterday. "I'd hate to go looking for another job after being here this long."

Another longtime employee, 53-year-old Donald White, who has been a baking foreman for 13 years, said the company's future is largely out of his hands but he's still trying hard to make it attractive to potential buyers.

"You need to keep doing the best you can," he said. "We are in this together, good or bad."

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