Colonial Cookies, a Kitchener, Ont.-based company has gone into receivership after 45 years in the business.
A story in the Record reports that the closure leaves 370 employees facing an uncertain future.
The company, which was founded in Kitchener in 1966, is a major player in the private label food business and produces premium cookies, national brand equivalents, organics and value cookies, including rotary, wire-cuts, crèmes and fig bars, with both regular and soft chewy formulations. The Record reports that the company produces President’s Choice cookies.
The company has laid off all the unionized and salaried workers. A few staff members are in the plant helping to ship inventory from the warehouse.
The Canadian Press reports that the workers have been off the job since their annual Christmas break. The story reports that those workers were not called back as planned on Jan. 5.
The Ontario Superior Court of Justice granted an application for a receivership order from Wells Fargo Capital Corp., the company’s bank, reports the Record.
A report from PricewaterhouseCoopers, the company’s receiver, says the company incurred a net loss of $6.8 million in fiscal 2010, and owes about $5.8 million to its main lender, Kitchener Colonial Holdings Inc., and about $10.1 million to unsecured creditors.
The company also owes about $747,000 in accrued vacation pay for employees and about $950,000 in pension plan obligations.
In the report, PricewaterhouseCoopers says a party it talked to previously when Colonial hired the firm to help it find an investor or possible purchaser has expressed interest in buying the business.
Although the outcome of negotiations is uncertain, it wants to expedite the sale process so it is more likely the company retains its customers and employees. It has set a deadline of Feb. 11 for offers for the business, reports the Record.