NEW YORK: Cooking television show America’s Test Kitchen has agreed to purchase recipe site Food52, which said it was forced to file bankruptcy after its lender unexpectedly swept cash from its bank accounts.
The offer from America’s Test Kitchen is worth US$6.5mil and will gives Food52 a path out of Chapter 11 under new ownership.
The stalking horse bid is subject to better offers should any materialise in the coming weeks.
The offer also provides Food52 with immediate access to cash to keep the business afloat as it seeks to complete the sale, according to court documents.
Food52 put itself and its other brands up-for-sale earlier this year and “engaged in herculean efforts to drive holiday sales” during the Thanksgiving holiday as well as Black Friday and Cyber Monday, Food52 chief executive office Erika Ayers Badan said in court papers.
But on Dec 15, Food52’s lender Avidbank “with no forewarning” swept nearly all of the company’s cash held at the bank, including “the reversal of employee payroll and benefits, as well as funds held in trust to be remitted to the federal government,” Badan said.
“Overnight, the company found itself scrambling for survival,” Badan said.
Avidbank did end up authorising the return of cash to cover Food52 employee’s payroll and 90% of its health insurance premiums, Badan said.
The actions by the bank led Food52 to terminate most of its workers and forced its remaining employees to work around-the-clock to keep the the company in business, she said. — Bloomberg
