YOUNGSTOWN, Ohio – Discussions with a potential buyer have closed, and the 120-year-old Schwebel Baking Co. is proceeding with a wind-down of its operations.
That’s according to an order filed Wednesday afternoon in U.S. District Court. It was filed after a Wednesday morning phone conference between attorneys for the company and several Teamsters locals.
“We’re continuing to wind down the business,” a Schwebel spokesman said in an email. “But we’d prefer not to comment at this time.”
The company announced last week that it would wind down its operations beginning this summer.
The unions are seeking a temporary restraining order and a preliminary injunction against Schwebel, as well as a motion to compel. The unions want to stop the company from distributing any money or assets to the company’s owners, shareholders or other creditors pending resolution of several grievances filed under their collective bargaining agreements.
The Teamsters locals also seek an order compelling Schwebel to “expeditiously proceed to arbitration of such grievances and to comply with any arbitration award issued by an arbitrator.”
Last week, both sides agreed to pause litigation in the case until Wednesday to continue discussions. A telephone conference was set for 9 a.m. before Judge David A. Ruiz, to whom the case is assigned. Court documents also filed last week said there was a potential buyer for Schwebel and the parties were in discussion to determine whether such a purchase was feasible.
Ruiz’s order also points to a lawsuit filed Tuesday in federal court against Schwebel. In that case, Spectrum Commercial Finance LLC seeks nearly $3.8 million plus interest, cost and fees it contends it’s owed by the company.
Schwebel “indicates said creditor intends to seek the creation of a receivership,” Ruiz’s order said.
A follow-up telephone conference for the case involving the Teamster locals is set for July 21.
Schwebel announced last month that it would be winding down operations this summer and that it expected to initiate liquidation of its assets. It said it has faced significant operational and financial constraints for many years. Among its challenges, it cited aging manufacturing facilities and equipment, costly labor contracts and pension obligations and consumer trends depressing demand for traditional bakery and bread products.