by Max Brantley
A bankruptcy trustee held a news conference this morning on the sale of Yarnell's ice cream assets to a Chicago snack food company with an existing plant in Searcy that is expected to resume ice cream production.
All important assets have been sold to Schulze and Burch Biscuit Company, including trademarks and recipes. (This is contrary to erroneous information we received yesterday about a recipe sale that was made at auction to a local man. The sale was not completed.)
I'll be curious on the workout of some $4 million owed to state agencies that loaned money to keep the Searcy dairy afloat and whether further state incentives are in play in putting the ice cream maker back in operation.
I'm as much a fan of the product and the preservation of old-line Arkie businesses as anyone. But it is a business. It should stand on its own legs, not on the state's shoulders. An outsider's ability to re-establish sales relationships in a soft ice cream market with a brand that had lost a big chunk of market share to a (inferior) Texas invader is no sure thing, however nostaglic I might be for Angel Food and other favorite Yarnell's flavors.
Rice said that he has entered into an agreement to sell all real property of Yarnell's, including the plant, equipment, to Schulze and Burch for $1,301,000. Schulze and Birch also bought the intellectual property of the company, including recipes, trademarks, licenses and internet domain names, for $38,940. Rice said he will file papers today with the bankruptcy court asking the sale be approved. Rice said an additional $200,000 was raised by the auction at the Yarnell's plant on Wednesday, and will be distributed to creditors. Rice said that Schulze and Birch will assume none of Yarnell's outstanding debt.
Rice said he rejected bids of $1.4 million and $1.45 million for all the company's real property, and another bid of $1.225 million was withdrawn. He also rejected four bids totalling $35,400 for the intellectual property of Yarnell's, including trademarks, recipes, internet domain names and licenses.
"It is my understanding that that company's intent is to reopen this factory and produce some product and provide jobs for the community. However, I do want to point out that is not a condition of this proposed sale or a requirement of this sale."
Regarding the $4 million owed to the state of Arkansas Economic Development Commission and the Arkansas Development Finance Authority, Rice said: "They are a secured creditor in this case, and they will be receiving a substantial sum, because they do have liens on some of the assets. The exact amount, I don't know for certain. There are some issues involving what they may be entitled to receive which we will resolve as we proceed forward."
Rice said he'll ask the court to shorten the time for creditors to object to the sale.
"My primary goal was to obtain maximum amount of dollars for the creditors."
Asked why he rejected seemingly higher bids for the real assets of Yarnell's, Rice said: "The $1.4 million dollar bid, had I accepted it, I would have only been receiving $1.4 million dollars. As a result of the way that I'm proceeding forward, I will receive or have received $1.54 million dollars. The process that I utilized enabled me to maximize the number of dollars that will come into the bankruptcy estate, and the amount that's going to be available to unsecured creditors at the end of the day."