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Chipwich: Old News 2007
CoolBrands sells Eskimo Pie, Chipwich brands to Dreyer's
Last Updated: Wednesday, January 24, 2007 | 6:42 PM ET
CBC News
Struggling CoolBrands International sold off more of its frozen treat empire as Dreyer's bought its popular Eskimo Pie and Chipwich brands, the company said Wednesday.
The Markham, Ont.-based company sold the two brands and its Real Fruit trademark to Dreyer's Grand Ice Cream for $18.9 million US. Dreyer's is a subsidiary of Swiss-based Nestlé.
CoolBrands began as Yogen Fruz in the 1980s.
Its founders — brothers Aaron and Michael Serruya — built it into the third-largest ice cream maker in North America.
Chipwich: Old News 2007
CoolBrands Sells Eskimo Pie and Chipwich Brands and Real Fruit Trademark, Along with Eskimo Pie Foodservice Business to Dreyer's Grand Ice Cream
Source: CoolBrands International, Inc.
24/01/2007 |
Toronto, Jan. 24 - CoolBrands International Inc. announced that its subsidiaries, Integrated Brands Inc. and Eskimo Pie Corporation have sold their Eskimo Pie and Chipwich Brands and Real Fruit trademark, along with Eskimo Pie soft serve product brands and related foodservice business segment to Dreyer's Grand Ice Cream, Inc., an indirect subsidiary of Nestle S.A., for a purchase price of approximately US $18,925,000, which includes approximately US$4,000,000 for accounts receivables and inventory associated with this transaction, subject to adjustments based on the final determination of the accounts receivable and inventory at the time of closing.
Dreyers will also assume the related liabilities in an amount that is estimated to be approximately US$1,000,000. Sugar Creek Foods, Inc., an indirect wholly owned subsidiary of CoolBrands, has also entered into a Co-Pack Agreement with Dreyer's to manufacture softserve yogurt and ice cream for a period of up to 9 months.
Net proceeds from the sale were used to repay the balance of debt owed by CoolBrands to JP Morgan Chase of approximately US$5,000,000, and the balance will be used for working capital purposes. For the fiscal year ended August 31, 2006, the revenues recognized by CoolBrands in respect of the assets sold to Dreyer's were US$35,412,000 (unaudited).
Chipwich: Old News 1992
COMPANY NEWS; Problems at Chipwich Unit Result in Chapter 11 Filing
Chipwich Inc., the New York maker of chocolate-chip-cookie ice cream sandwiches, filed for
bankruptcy protection late Friday as a result of reportedly illegal actions at its Peltz Food division.
bankruptcy protection late Friday as a result of reportedly illegal actions at its Peltz Food division.
Chipwich had said in early June that it defaulted on its bank loans after it was found that the
Peltz division, which distributes frozen and refrigerated foods, had overstated inventories for the
fourth quarter of 1991 and the first quarter of 1992.
Peltz division, which distributes frozen and refrigerated foods, had overstated inventories for the
fourth quarter of 1991 and the first quarter of 1992.
This is the second time the company, which began selling ice cream sandwiches from pushcarts
in Manhattan, has filed for Chapter 11. In 1984, Chipwich sought bankruptcy protection,
burdened with heavy debt. 'Possible Misfeasance'
in Manhattan, has filed for Chapter 11. In 1984, Chipwich sought bankruptcy protection,
burdened with heavy debt. 'Possible Misfeasance'
This time, "Chipwich's financial difficulties are related directly to the actions and possible
misfeasance of the prior management of its Peltz Food division, headed by Mr. Robert Peltz,"
Samuel Metzger, the company's president and chief operating officer, said in court documents.
misfeasance of the prior management of its Peltz Food division, headed by Mr. Robert Peltz,"
Samuel Metzger, the company's president and chief operating officer, said in court documents.
He said the inventory overstatements at Peltz might have caused Chipwich to understate its 1991
loss of $1.4 million on sales of $4.8 million.
loss of $1.4 million on sales of $4.8 million.
In addition, Mr. Metzger said, Mr. Peltz may have "engaged in other improprieties in the
management and operations of the Peltz Food division." Chipwich notified the Securities and
Exchange Commission and the United States Attorney's office in Manhattan of the problems at
Peltz.
management and operations of the Peltz Food division." Chipwich notified the Securities and
Exchange Commission and the United States Attorney's office in Manhattan of the problems at
Peltz.
Mr. Metzger was not available to comment yesterday.
Some of Chipwich's 20 largest unsecured creditors include Nestle, owed $190,457; Borden Inc.,
owed $110,410, and the Campbell Soup Company, owed $81,097. Resignation Sought
owed $110,410, and the Campbell Soup Company, owed $81,097. Resignation Sought
After discovering financial problems at Peltz Food, the board of directors asked Mr. Peltz
to resign as chairman and chief executive officer in late May.
to resign as chairman and chief executive officer in late May.
Mr. Peltz's resignation, coupled with the revelations about overstated inventories, caused the
company to default on its loans with First Fidelity Bank of New Jersey.
company to default on its loans with First Fidelity Bank of New Jersey.
On July 17, the United States Attorney seized all Peltz division records, computer files and
equipment. Unable to conduct business, Peltz Food began liquidating in mid-July.
equipment. Unable to conduct business, Peltz Food began liquidating in mid-July.
Chipwich had planned to sell Peltz, which it acquired in 1989, and buy two smaller food
companies.
companies.
Earlier this year, Chipwich's stock was delisted from over-the-counter trading.
Chipwich: Old News 1990
Passing the Hat...Again
Offering more stock to shareholders (a rights offering) may be the best way to raise new capital.
By Ellyn E. Spragins | Sep 1, 1990
An offering to your current shareholders may be your best source of funds
Would you throw good money after bad? That's often the question at the heart of a versatile but little-used money-raising technique called a rights offering. Profitable companies can usually attract new investors. But companies that are down on their luck often can't. For them a rights offering, which offers a company's shareholders the right to buy more stock at a preestablished price, may be the best bet for raising needed capital.
If your company has been losing money, your investors are probably disillusioned. Worse, they may be holding stock certificates worth only a fraction of what they paid for them. And a rights offering will further dilute the value of those shares. On the other hand, your shareholders once believed in your company. If you've tackled its problems, you may be able to reignite that belief. For an investor, it can be a seductive argument: instead of selling the stock and taking a hated loss, he or she can buy more shares at a cheaper price and bring down the average cost.
A rights offering can do more than raise money. For companies that are enlarging a shareholder's position, rights offerings provide a way to make sure no one feels cheated; when every shareholder has a chance to buy stock on the same terms, the company can't be accused of offering a sweetheart deal to the major stockholder.
That, in part, was Sam Metzger's motivation in offering his 500-plus shareholders a chance to buy more shares in Chipwich Inc. There's no question that he also needed the money. Chipwich, founded in 1980, achieved remarkable fame because of its product -- ice cream sandwiched between two chocolate-chip cookies and rolled in chocolate chips. Sold from snappy-looking pushcarts, Chipwich ice-cream sandwiches were wildly popular. The business overexpanded, expenses soared, and in 1984 three Chip-wich creditors forced the company into bankruptcy.
By 1987 Metzger, who cofounded Chipwich with Richard LaMotta, had slogged through the company's reorganization and found a new lease on life in the form of Hexagon AB, a Swedish holding company that agreed to invest $1 million in Chipwich, guarantee loans, and license its products. But as Chipwich began to grow again, it faced two problems.
The first was money. Like any ambitious company, it needed more. Unlike other companies, though, it had few options. Being an ex-bankrupt company doesn't have the stigma it used to -- but banks still don't line up to see you.
The second problem was an odd one. Metzger and his lawyers had been lucky enough to get all of Chipwich's unsecured creditors to cancel the company's debt obligations in return for a small cash payment and equity. That, of course, turned the creditors into shareholders. The exchange also required Chipwich to begin filing reports with the Securities and Exchange Commission. Once it did, Chipwich would effectively become a public company because its shares could be sold in the open market.
The problem? Metzger wanted a stable stock price and an orderly market. No one knew how much a Chipwich share was worth or what the creditors would do with their shares once they could get rid of them. By issuing rights, Metzger hoped to establish a price for the stock and raise money. Here's the offer he made:
Chipwich shareholders received the right to buy one share of common stock for every two shares they owned. Shareholders had about 45 days to exercise their rights. For each share, holders had to surrender one right and pay $1. No partial subscriptions were allowed -- it was all or nothing. Nor could shareholders sell their rights, a feature of some such offerings.
The key figure here is the buck that Chipwich was asking shareholders to pay for each new share. Because Chipwich had only marginal income, Metzger had to try to assess the value of Chipwich's name brand. Also influencing the price: Chipwich's prior sale of 600,000 shares to Hexagon for $1 per share. The valuation was cobbled together out of such subjective data that Chipwich's prospectus says right up-front: "The offering price has been arbitrarily determined by the Company."
The chief drawback of a rights offering is that you don't know if it will work; that is, how many shareholders will bite and how much cash it will raise. That's why some companies hire an underwriter as a backup to sell those shares that no one subscribes for. But Chipwich had designed its rights offering around its own backup -- Hexagon.
Hexagon was entitled -- and agreed -- to purchase 949,922 shares of the 1,924,815 shares being offered through the rights offering. It also told Chipwich it would buy any shares that were left over at the end of the subscription period by exercising its oversubscription privilege.
Hexagon took the biggest share of the offering; Metzger and LaMotta exercised their rights, too. What was surprising was that some 45 other shareholders, mostly former creditors, also subscribed. "To be a creditor usually leaves a bad taste in one's mouth," says Chipwich treasurer Robert Doria. After all rights were exercised, Chipwich's rights offering raised just over $2 million.
Expenses were negligible. The SEC required Chipwich to file an S-18, but that was easy. The company's plan of reorganization, drawn up while it was in Chapter 11, contained most of the necessary financial and historical information. Total expenses, mainly legal and auditing fees, came to $120,000.
Aside from the all-important cash, Chipwich's rights offering established a stock price that has held up reasonably well in subsequent trading. Since the offering in February 1987, the stock has traded as high as $2 and as low as 56¢. During the first half of this year, it has hovered around $1.25 per share.
But even an apparently successful rights offering doesn't always work out the way you expect. Metzger thought the offering had firmly cemented the company to a powerful protector -- Hexagon. Last winter, however, it discovered that Munksjo AB, a Swedish forestry company, had bought a controlling interest in Hexagon. Now Metzger will discover just how far Chipwich's rights will go.
Would you throw good money after bad? That's often the question at the heart of a versatile but little-used money-raising technique called a rights offering. Profitable companies can usually attract new investors. But companies that are down on their luck often can't. For them a rights offering, which offers a company's shareholders the right to buy more stock at a preestablished price, may be the best bet for raising needed capital.
If your company has been losing money, your investors are probably disillusioned. Worse, they may be holding stock certificates worth only a fraction of what they paid for them. And a rights offering will further dilute the value of those shares. On the other hand, your shareholders once believed in your company. If you've tackled its problems, you may be able to reignite that belief. For an investor, it can be a seductive argument: instead of selling the stock and taking a hated loss, he or she can buy more shares at a cheaper price and bring down the average cost.
A rights offering can do more than raise money. For companies that are enlarging a shareholder's position, rights offerings provide a way to make sure no one feels cheated; when every shareholder has a chance to buy stock on the same terms, the company can't be accused of offering a sweetheart deal to the major stockholder.
That, in part, was Sam Metzger's motivation in offering his 500-plus shareholders a chance to buy more shares in Chipwich Inc. There's no question that he also needed the money. Chipwich, founded in 1980, achieved remarkable fame because of its product -- ice cream sandwiched between two chocolate-chip cookies and rolled in chocolate chips. Sold from snappy-looking pushcarts, Chipwich ice-cream sandwiches were wildly popular. The business overexpanded, expenses soared, and in 1984 three Chip-wich creditors forced the company into bankruptcy.
By 1987 Metzger, who cofounded Chipwich with Richard LaMotta, had slogged through the company's reorganization and found a new lease on life in the form of Hexagon AB, a Swedish holding company that agreed to invest $1 million in Chipwich, guarantee loans, and license its products. But as Chipwich began to grow again, it faced two problems.
The first was money. Like any ambitious company, it needed more. Unlike other companies, though, it had few options. Being an ex-bankrupt company doesn't have the stigma it used to -- but banks still don't line up to see you.
The second problem was an odd one. Metzger and his lawyers had been lucky enough to get all of Chipwich's unsecured creditors to cancel the company's debt obligations in return for a small cash payment and equity. That, of course, turned the creditors into shareholders. The exchange also required Chipwich to begin filing reports with the Securities and Exchange Commission. Once it did, Chipwich would effectively become a public company because its shares could be sold in the open market.
The problem? Metzger wanted a stable stock price and an orderly market. No one knew how much a Chipwich share was worth or what the creditors would do with their shares once they could get rid of them. By issuing rights, Metzger hoped to establish a price for the stock and raise money. Here's the offer he made:
Chipwich shareholders received the right to buy one share of common stock for every two shares they owned. Shareholders had about 45 days to exercise their rights. For each share, holders had to surrender one right and pay $1. No partial subscriptions were allowed -- it was all or nothing. Nor could shareholders sell their rights, a feature of some such offerings.
The key figure here is the buck that Chipwich was asking shareholders to pay for each new share. Because Chipwich had only marginal income, Metzger had to try to assess the value of Chipwich's name brand. Also influencing the price: Chipwich's prior sale of 600,000 shares to Hexagon for $1 per share. The valuation was cobbled together out of such subjective data that Chipwich's prospectus says right up-front: "The offering price has been arbitrarily determined by the Company."
The chief drawback of a rights offering is that you don't know if it will work; that is, how many shareholders will bite and how much cash it will raise. That's why some companies hire an underwriter as a backup to sell those shares that no one subscribes for. But Chipwich had designed its rights offering around its own backup -- Hexagon.
Hexagon was entitled -- and agreed -- to purchase 949,922 shares of the 1,924,815 shares being offered through the rights offering. It also told Chipwich it would buy any shares that were left over at the end of the subscription period by exercising its oversubscription privilege.
Hexagon took the biggest share of the offering; Metzger and LaMotta exercised their rights, too. What was surprising was that some 45 other shareholders, mostly former creditors, also subscribed. "To be a creditor usually leaves a bad taste in one's mouth," says Chipwich treasurer Robert Doria. After all rights were exercised, Chipwich's rights offering raised just over $2 million.
Expenses were negligible. The SEC required Chipwich to file an S-18, but that was easy. The company's plan of reorganization, drawn up while it was in Chapter 11, contained most of the necessary financial and historical information. Total expenses, mainly legal and auditing fees, came to $120,000.
Aside from the all-important cash, Chipwich's rights offering established a stock price that has held up reasonably well in subsequent trading. Since the offering in February 1987, the stock has traded as high as $2 and as low as 56¢. During the first half of this year, it has hovered around $1.25 per share.
But even an apparently successful rights offering doesn't always work out the way you expect. Metzger thought the offering had firmly cemented the company to a powerful protector -- Hexagon. Last winter, however, it discovered that Munksjo AB, a Swedish forestry company, had bought a controlling interest in Hexagon. Now Metzger will discover just how far Chipwich's rights will go.
13 October, 2011
01 September, 2011
26 August, 2011
24 August, 2011
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