Koffee Kup and Vermont Bread workers must continue to wait for back pay

Harka B. Subba, left, and Bhim Rai are seen outside the Koffee Kup Bakery factory in Burlington on April 27, 2022. The two night workers lost their jobs when the bakery abruptly closed. Photo by Glenn Russell / VTDigger

Some 250 laid-off workers at Koffee Kup Bakery and its subsidiary Vermont Bread Company will have to wait longer for the resolution of their months-old retroactive payment claims after a growing group of other creditors successfully lobbied Tuesday to delay a court ruling until they can be heard.

About 150 Burlington employees and 100 Brattleboro colleagues were surprised on April 26 to have their manufacturing and distribution plants shut down abruptly without explanation, leading the judge to appoint a receiver to sell the assets.

Chittenden Superior Court Judge Samuel Hoar Jr. recently ruled that the undisclosed proceeds from the last-minute surprise purchase of properties by Flowers Foods – the $ 4 billion maker of national brands such as Wonder Bread – could reimburse three major lenders about $ 8 million in loans. .

The judge had hoped to resolve the workers’ separate claims for nearly $ 800,000 in vacation and sick leave accrued at a hearing Tuesday. Instead, he clashed with lawyers for eight other creditors who convinced him to wait at least a week until they could make their own case.

“The court hoped that today there would have been an agreement on how to proceed,” Hoar said from the bench. “It is clear to the court that there is none. The list of people seeking to participate in one way or another in the party is growing.

Koffee Kup lawyer Alexandra Edelman had asked the judge to pay the employees as soon as possible so that interest did not accumulate on what is owed.

“These amounts will increase the more we delay this,” she said.

But lawyers for several other creditors have expressed more concern about their own bills.

KeyBank representative John Kennelly said, “The bank’s only concern is that they get their legal fees paid.”

And Robert DiPalma, advising several other clients: “Our interest here is that if there is a fund of money, we want to be at the table and make sure there is a fair process to distribute it.

After an hour, the judge postponed any decision until another hearing on July 14.

Customers who hoped Koffee Kup and Vermont Bread would rehire workers and bring local baked goods back to store shelves were shocked on June 7 when the bakeries were sold to Georgia-based Flowers Foods, which quickly released a press release saying he had “no immediate plans to reopen” plants in Burlington or Brattleboro.

Although the sale price has not been made public, the attorneys involved say they can pay KeyBank secured creditors $ 7.6 million, $ 213,000 to the Vermont Economic Development Authority and $ 84,000 to Continental Indemnity. Co. and they still have some money left.

How much is what other people want to know.

“It is the lack of this information that stands in the way of solving the problems,” said André Bouffard, a lawyer representing several interests.

Flowers Foods bought the company under a confidentiality agreement, although Koffee Kup’s attorney offered to share financial information with select peers on Tuesday.

“This can all be a moot point,” said Edelman, “because my hope is that once they figure out how much is available, we can move on.”

Workers, for their part, complained that the company paid the accumulated vacation and sick leave into their accounts after closing, only to then withdraw them electronically from their accounts due to a disagreement over responsibility to cover. these obligations.

Attorney General TJ Donovan filed court documents on May 19 in support of an emergency appeal for employees to be reimbursed nearly $ 800,000.

The judge on Tuesday expressed his eagerness to resolve any issues as soon as possible.

“The tension between and among potential applicants will only intensify as we wait,” he said.

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