YOUNGSTOWN, Ohio – There’s a potential buyer for the 120-year-old Schwebel Baking Co., according to court documents.
In an order filed Wednesday in U.S. District Court in Youngstown, Judge Donald C. Nugent wrote that Schwebel Baking Co. indicated it may need to go through an expedited Chapter 11 bankruptcy process to achieve a sale of its business to a potential buyer.
“There is presently a potential buyer for [Schwebel] and the parties to this litigation are in discussion to determine whether such a purchase is feasible,” the order says.
On Tuesday, several Teamsters locals filed a motion for a temporary restraining order and a preliminary injunction against Schwebel as well as a motion to compel. The unions seek 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 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.”
Nugent’s order says the parties have agreed to pause litigation in the case until July 15 to continue discussions. A telephone conference is set for 9 a.m. that day before Judge David A. Ruiz, to whom the case is assigned.
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. It cited aging manufacturing facilities and equipment, costly labor contracts and pension obligations and consumer trends depressing demand for traditional bakery and bread products among its challenges.
The company produces high-quality bread, buns and rolls for retail, grocery, food service and institutional customers across Ohio, Pennsylvania and New York.
The announcement said the wind-down would include the company’s bakeries in Youngstown and Hebron and its retail stores and distribution centers across the tri-state area.
In a June 17 Worker Adjustment and Retraining Notification, the company wrote that the closure of its operations at 920 and 965 E. Midlothian Blvd. would affect 370 employees. It said permanent layoffs were expected to start this week.
In a separate WARN filed the same day, the company wrote that closure of its Hebron, Ohio, operation would affect 121 employees.
The company also has locations in Cambridge, Columbus, Cuyahoga Falls, Dayton, Mansfield, Mentor, North Canton, Strongsville, Walbridge and Valley View, but because of a lower number of employees, those operations didn’t require WARN letters.