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www.chicagobusiness.com
Judge
approves sale of Jays Foods
By Lorene Yue
Dec. 04,
2007
(Crain's) — Jays Foods Inc. was sold to Jay's
Acquisition Inc. in spite of a retired Chicago banker's bid to
submit a competing offer that could have included money from a
former McDonald's Corp. executive and Mike Ditka as well as a
$4.5-million tax break.
Bankruptcy Court Judge Pamela
Hollis approved the $24.8-million sale of most of the firm’s
assets Tuesday to Jay’s Acquisition Inc., believed to be
pretzel-maker Snyders of Hanover Inc., as part of Jays Foods’
Chapter 11 bankruptcy proceedings. The deal means the
Chicago-based snack brands of Krunchers chips and O-Ke-Doke
snacks will now belong to a Hanover, Pa., company.
Wallace
Sims Jr., a retired banker, tried to keep the company based on
Chicago’s South side. He had asked for more time to put
together rival bid for the 80-year-old snack manufacturer, but
Judge Hollis denied his request on Tuesday given a lack of
concrete financing.
Jays Foods, which filed for
bankruptcy protection on Oct. 11 for the second time in four
years, had conducted a court-approved auction process in
search of buyers willing to trump the offer by Jays
Acquisition Inc. No qualified bidders emerged by the sale
deadline.
Gary Grasso, a lawyer for Mr. Sims, said he
received a call Monday from Mr. Ditka’s representatives
expressing interest in being part of a competing bid. Mr.
Grasso also said he contacted a former McDonald’s executive
in addition to a current member of its board about investing
in a deal to buy Jays Foods.
“They were clearly
interested because of what (Jays) is,” Mr. Grasso said.
In
addition, Alderman Michelle Harris (8th Ward) said she had
approval to divert $4.5 million in unused tax-increment
financing funds that had been promised as part of a Jays
Foods’ plant expansion to any capital improvement on the 825
E. 99th St. facility.
Jays Foods is closing the
manufacturing operations at 99th Street on Wednesday, a move
that will eliminate 220 jobs. A warehouse and distribution
center employing a total of 420 workers at the same address
will operate for an unspecified period of time, the company
said.
Ms. Harris said she lobbied for the TIF funds
with hopes of staving off a loss of jobs in her ward as well
as the eyesore of an empty building.
“What we have
here is a white elephant,” she said about the closing
manufacturing plant. “A non-productive building.”
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