BRATTLEBORO — In an unexpected move, the Georgia-based company Flowers Foods has purchased Koffee Kup Bakery and its assets, which include Vermont Bread Co. in Brattleboro.
Flowers Foods — the parent company of Nature’s Own, Wonder and Dave’s Killer Bread, among other bakery brands — announced in a news release Monday that it had acquired Koffee Kup, which closed abruptly in April. The announcement came less than two weeks after the owners of a Canadian commercial bakery said they planned to buy and restart Koffee Kup under the name of a new company.
Nearly 250 people were laid off in Vermont due to the Vermont-based bakery’s closure, including 91 at the Vermont Bread Co. plant on Cotton Mill Hill in Brattleboro. Workers at the Koffee Kup plant in North Grosvenordale, Conn., also lost their jobs.
In the news release Monday, Flowers Foods President and CEO Ryals McMullian said his company has “no immediate plans to reopen the bakeries” but that it “will be assessing how they may fit our strategic network optimization efforts in the future.”
“This acquisition brings brands and production capacity in the Northeast, a key growth market for our company,” he said.
Flowers Foods reported $4.4 billion in sales revenue last year, according to the release. The company did not report terms of the Koffee Kup purchase, and a Flowers Foods spokesman did not immediately respond to a request for that information.
Karen Crane, a spokeswoman for KeyBank, which holds debt with Koffee Kup, said those terms were arranged by Flowers Foods and Ronald Teplitsky, a New York business adviser who was tapped in May to manage Koffee Kup’s financial assets. Crane declined to share details of the sale, saying she is unable to discuss clients’ financial information.
Justin Heller, an attorney for Teplitsky, did not immediately respond to a request for more information Monday evening.
At a remote hearing that day in the Vermont Superior Court’s Chittenden County branch, however, Heller said proceeds from the sale will be used to pay former Koffee Kup workers for their unused time off, according to reporting by The Brattleboro Reformer.
That compensation — nearly $800,000 — was cut from workers’ final paychecks due to a dispute between Teplitsky and the investment firm American Industrial Acquisition Corp. (AIAC), which closed Koffee Kup shortly after acquiring the bakery, over who was responsible for paying it.
The dispute had become the recent focus of a lawsuit KeyBank filed April 30 in which it claims Koffee Kup had not repaid more than $7 million in loans from the bank. Vermont Attorney General T.J. Donovan got involved in the case in late May, arguing in a legal brief that Teplitsky and KeyBank must pay Koffee Kup workers’ unused time off.
Shortly thereafter, Blair and Rosalyn Hyslop — who own Mrs. Dunster’s Bakery in New Brunswick, Canada — announced plans to acquire Koffee Kup and Vermont Bread Co. The couple intended to hire about 180 people over two years between the two brands, Blair Hyslop told The Sentinel on May 27.
Blair Hyslop said Tuesday morning that the news of the sale to Flowers Foods came as a “saddening” surprise to him.
“For us, this came completely out of left field,” he said. “We’re shocked and dismayed. We were expecting to sign agreements yesterday and start production today.”
In the court hearing Monday, however, Heller said Flowers Foods’ offer for Koffee Kup exceeded those from the Hyslops and also from East Baking Co. in Holyoke, Mass., according to reporting by The Brattleboro Reformer. “By comparison, the other offers of Mrs. Dunster’s and East Baking were not sufficient to pay even KeyBank in full,” he said.