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Member Since: 5/2007Last Seen: 11/06/2009
Member Since: 5/2007Last Seen: 11/06/2009
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PrintArchway Cookies Business Crumbles into Chapter 11; Creative Bookkeeping at Fault?
News Type: Event — Fri Oct 10, 2008 1:41 AM EDT
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The initial distress felt by lovers of homestyle cookies at the news that Archway & Mother's Cookies Co. filed for Chapter 11 bankruptcy this week is yielding to calls for an investigation into -- and former employees signing on to lawsuits against -- the management of the business by Cattertan Partners, headed by COO George Knobloch.
Several former employees claim that accounting irregularities led to the loss of operating funds. According to a corporate employee at the Battle Creek office, both Ernst & Young and Price Waterhouse accounting firms had been at the company offices earlier this year, and their main bank, Wachovia, also put in a surprise visit to ask for verification of data. This same corporate employee also states:
approximately $11 million dollars worth of fake sales had been put into the system at COO George Knobloch's direction. These were all backed out and Financial Statements since January had to be restated, as well as bank reporting information. Soon after, representatives from the Dispute Analysis & Forensics area of Alvarez and Marsal confiscated an employee computer in the Accounting dept. It was clear to all that worked there that we were going under and it was definitely not quote, unforeseeable, unquote.
Several former Independent Distributors say that cases of cookies were added to their orders, but never delivered, in order to inflate the value of the business and gain higher loan amounts. The motive for this manipulation of the Independent Distributor accounts was to force them out for falsifying orders and non-delivery of goods, supposedly so that the company could be sold to another entity. Ridding the company of these contractors means that they can drop distributors at any time without the expense of buying out the contracts. Archway has been working to force as many IDs, as they are called, to quit, and has done business directly with the chain wholesalers.
In its bankruptcy filing earlier this month, Archway & Mother's Cookie Co. listed assets in excess of $50 million and liabilities of more than $500 million.
An announcement early in the week said that Knobloch stepped down as chief executive, but later reports are that he was asked to stay on for another two weeks. He plans to move next to a chief executive position with Broyhill, the manufacturer of recliners.
Former workers may contact the office of the mayor of Battle Creek for information on how to contact the legal firm in Lansing which is handling a lawsuit on their behalf. Over seventy Independent Distributors in the northeast have signed on to a breach of contract lawsuit with McCarter & English law firm; their contact is James DeDonato at jdedonato@mccarter.com. Interested parties may also search the website for the firm Kurtzman Carson Consultants for several legal papers on file. Also, reporter Ryan Holland of the Battle Creek Enquirer can be reached at 966-0690 or rholland@battlecr.gannett.com.
According to the Ashland Times-Gazette of Oct. 6: Mother's Cake & Cookie Co. and Archway Cookies LLC intend to seek Court approval to retain Focus Management Group, a corporate advisory and restructuring firm, to assist in the wind-down of the U.S. operations. Upon Court approval, Jeff Granger of Focus Management Group will be appointed as Chief Restructuring Officer (CRO) of the Company. (per Topix, Focus Management has a toll-free number at 888.733.1544.)
Speculation abounds that Keebler will buy Mother's and/or Archway as it emerges from bankruptcy, with CBC buying the Salerno, Mrs. Alison and possibly the Archway brands, along with the Kitchener bakery plant. Archway had previously been owned by Deerfield-based Specialty Foods Corp. According to a company profile, variations of Archway's famous oatmeal cookie had accounted for 40 percent of overall sales. The Salerno butter cookies and coconut bars are sold in Illinois, Wisconsin and Indiana. Salerno started in 1936 and was a big company until Archway purchased them in 2001.
The company sent notices to the cities of Battle Creek and Ashland, Ohio, stating that the two locations would close, putting approximately 160 people out of work, 59 of those in Battle Creek. Archway distributors across the country have lost their jobs as well. Employees were notified either by letter or by a group announcement at the factory that the plants would be closing.
Employees were treated with very short shrift. They were told that their insurance was terminating, and that COBRA would not be offered. According to one California family, they would not even be paid for the last week of work. Mary Norwood wrote on Topix: Employees will not receive a pay-check for work that was done week of 9/29/08.)
Suspicions are that operations will be shifted to the Canadian plant in Kitchener. Factory equipment was sighted being removed from the Ohio plant and loaded onto Canadian moving trucks, as reported by a commenter on the Topix site. To quote: Our local paper reports that a truck left the plant in Ashland loaded with equipment. Funny thing is that the trucking company is from around a place in Canada that has a plant.
Reportedly Davis Cookie in Pennsylvania still produces Archway and distributes to all of Pennsylvania.
[Compiled from stories in the Battle Creek Enquirer by Ryan Holland, in The SouthStar News by Mike Nolan, the Ashland Times-Gazette, and the WOOD-TV of Grand Rapids and Michigan forum called Topix.]
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7.1
{"commentId":3411353,"authorDomain":"MinnieApolis"}
The Topix site has over 170 comments on the forum thread, many from employees and Independent Distributors. So if you are in need of cases of cookies to sell at your store or as a fund-raiser, check the site for emails of IDs with cookies to unload.
Best wishes to all the former employees and IDs; it is a tough time to lose a job and I just hope that they will be able to hang in there.
{"commentId":3411353,"threadId":"384460","contentId":"1978456","authorDomain":"MinnieApolis"}
- 2 votes
#1 - Fri Oct 10, 2008 1:45 AM EDT{"commentId":3412006,"authorDomain":"adventurebooks"}
MinnieApolis - This is only the tip of the iceberg, unfortunately. Over the next 6-12 months, many other companies will be forced into Chapter 11.
{"commentId":3412006,"threadId":"384460","contentId":"1978456","authorDomain":"adventurebooks"}
- 2 votes
#2 - Fri Oct 10, 2008 3:41 AM EDT{"commentId":3421203,"authorDomain":"MinnieApolis"}
{"commentId":3428816,"authorDomain":"Meloney"}
ah - and brings to mind the stress and cravings of Interstates Bakeries workers and lovers of Twinkies and Wonder Bread.
The shelf space and caloric count has not not gone unfilled. I'm thinking we consumers might be better off for a new breed of bakery products and business organization.
{"commentId":3428816,"threadId":"384460","contentId":"1978456","authorDomain":"Meloney"}
- 4 votes
#3 - Fri Oct 10, 2008 10:32 PM EDT{"commentId":3433659,"authorDomain":"MinnieApolis"}
Well, I love cookies and millions of kids and adults do, too. And apparently lots of folks are not buying the canned statement from the company that blames rising costs for ingredients and transport. Over a hundred people have found this article already just by using the search engines, and it has not been up a day and half yet. So more power to those former employees and IDs, and I hope they all get hooked up with each other and with some power attorneys.
{"commentId":3433659,"threadId":"384460","contentId":"1978456","authorDomain":"MinnieApolis"}
- 2 votes
#4 - Sat Oct 11, 2008 9:46 AM EDT{"commentId":3435731,"authorDomain":"rkdcf"}
Archway, on several ocassions over the past 1 1/2 years, forced out product to the distributors. We were pretty much forced to take it, or you had to worry about the charges for the product not being removed from your ledger. A couple times it was specificaly stated that we would receive extra product and to accept it becouse they needed to reach their numbers to get more credit with the bank. If it was a week that this extra product was not sent out, then most likely your order was shorted. I Now think they produced what they could when they could and forced it out. This past year a typical weekly order of 250 cases or so would be shorted to 150, or about 60% of what you ordered. I went 6 months unable to get a certain flavor at one point. The writing has been on the wall for a LONG TIME. THIS IS NOT UNFORESEEABLE CIRCUMSTANCES. That is a flat out LIE. I read these news articles and blogs and hear of these letters being sent to employees and a couple meetings that were held, etc. To this day I have not received on letter or phone call from a representative of this company. They closed on last Friday...I was out Monday and Tuesday of the following week doing business as usual becouse...after 5 years of service I did not even get a phone call from a District Manager or anything to tell me what was going on. Just left hanging. I found out from a competitor while making a delivery. How sad. Then I went home and called the District Manager who said, "oh yeah, they closed last Friday". Now I need to find a job so I can feed my family next week. Sounds like our leader, George Knobhead, or whatever his name is, already has another multi-million dollar job lined up with Broyhill. Didn't I just read he altered books, etc? I have lost all faith in commen decency and respect.
{"commentId":3435731,"threadId":"384460","contentId":"1978456","authorDomain":"rkdcf"}
- 2 votes
#5 - Sat Oct 11, 2008 12:20 PM EDT{"commentId":5562064,"authorDomain":"scovik88"}
This is really sad. I was a distributor for 8 years back in the late 80's to early 90's and I was not happy wiht the company after I built up my route and then they came in and moved me. But I was able to get out on my own terms. I feel bad for you all and if it were me I would surely start a letter writing campaign to Broyhil to let them know what kind of dog they are getting! I had no idea this was going on. I just went to search and see how the company was doing. Good luck to you all.
{"commentId":5562064,"threadId":"384460","contentId":"1978456","authorDomain":"scovik88"}
- 1 vote
{"commentId":5569389,"authorDomain":"MinnieApolis"}
{"commentId":6081324,"authorDomain":"melissax1972"}
I just happened to read your post, are you sure that Archway is making a comeback?!! I have been ging through serious withdrawal...lol. I miss their oatmeal and lemon cookies. I grew up eating these. Yesterday i walked into a neighborhood grocery and lo and behold there they were on the shelf..The owner of he store sais that Jay's(potato chips) delievers them from now on. I don't know what to believe , but best believe i bought every package of oatmeal before I left the store. I hope you are right.
{"commentId":6081324,"threadId":"384460","contentId":"1978456","authorDomain":"melissax1972"}
{"commentId":3436664,"authorDomain":"porterarchway"}
I am an ID in KC. I was told by Lynn Holm, at Battle Creek, I could keep working, I asume because I have a contract. Anyone else out there being told its ok to keep working???
{"commentId":3436664,"threadId":"384460","contentId":"1978456","authorDomain":"porterarchway"}
- 2 votes
#6 - Sat Oct 11, 2008 1:33 PM EDT{"commentId":3436997,"authorDomain":"rkdcf"}
I have heard some of the same, but you have to pay to have the product shipped to you. The large chains that I service have said they don't want anymore and are holding their payments to cover markdowns and credits for what they have. Space is gone in some stores. Maybe some true attempt on behalf of the company to communicate with us would have gave us the information we needed to communicate with our customers. I would not trust that I was going to get paid. I cannot afford to put another 200.00 /week into fuel and then not get paid on top of that. I put on a lot of miles to run my route. My DM said all of last weeks payroll checks bounced?? I had a large cash sale so no check, so I do not know if this is fact or not. I will sell what I have left for cash, to help to cover what my territory is worth if it had been bought out and move on. Keep in touch, I hope it works out for you. Keep posting.
{"commentId":3436997,"threadId":"384460","contentId":"1978456","authorDomain":"rkdcf"}
- 2 votes
{"commentId":3441038,"authorDomain":"MinnieApolis"}
{"commentId":3441143,"authorDomain":"MinnieApolis"}
{"commentId":3441874,"authorDomain":"rkdcf"}
MinnieApolis, Thanks for the link. I will check it out. I wish you well.
{"commentId":3441874,"threadId":"384460","contentId":"1978456","authorDomain":"rkdcf"}
- 2 votes
{"commentId":3562484,"authorDomain":"sbutki"}
Lurking
{"commentId":3562484,"threadId":"384460","contentId":"1978456","authorDomain":"sbutki"}
- 1 vote
#7 - Sat Oct 18, 2008 11:59 AM EDT{"commentId":3562554,"authorDomain":"psychotic-wanderer"}
One of my coworkers brought this to my attention last week. She is sad she wont be able to buy those mothers frosting covered animal cookies (the pink and white ones). I detest the things, but my husband loves them... so Im not mentioning to him that they are filing or he will probably drag me to every store near here and buy what they have left.
{"commentId":3562554,"threadId":"384460","contentId":"1978456","authorDomain":"psychotic-wanderer"}
- 1 vote
#8 - Sat Oct 18, 2008 12:05 PM EDT{"commentId":3878803,"authorDomain":"helpme"}
Almost 2 years ago my local grocer told me that the Rep for Mothers/Archway had stopped coming around and within a few weeks their shelf space was gone. Then, they disappeared from the Houston-area market(4th Largest City in the US). A phone call to the company revealed that they were establishing a 'new & improved distribution and marketing system'; in retrospect, it's obvious what was going on. The CEO, Knobprick, or whatever his name is, and his henchmen should be prosecuted for having looted the Company and for having stolen from the employees and Lordonlyknowswhoelse, their assets seized and Penitentiary time arranged for. These people are nothing but common thieves and should be dealt with as such.
{"commentId":3878803,"threadId":"384460","contentId":"1978456","authorDomain":"helpme"}
- 2 votes
#9 - Tue Nov 4, 2008 3:41 PM EST{"commentId":3881676,"authorDomain":"MinnieApolis"}
{"commentId":4129706,"authorDomain":"bwifl"}
I am heartbroken, bereft. For years--and I mean at least 20--I made it a point to check a local supermarket whenever I traveled to look for Archway's Old-Fashioned Molasses cookies--the scalloped ones with the sugar on top. Then the time came that I could actually get them in NYC. More recently bags of Ginger Snaps appeared on the shelf and also Iced Molasses, which, alas, I never got to try,
My delight all this past summer was to crumble Archway ginger snaps into my French Vanilla ice cream (Friendly's or Turkey Hill). That was cookies and cream for grownups!
Here I am still longing for the Nabisco cookies of my childhood -- the scalloped chocolate cookies, the scalloped butter rings, and more -- and now this latest deprivation.
Incidentally, I took a look at Foodlocker.com, which is charging absurdly high prices (300% markup) for the Archway stock they have hoarded. Better to take up baking.
{"commentId":4129706,"threadId":"384460","contentId":"1978456","authorDomain":"bwifl"}
- 2 votes
#10 - Wed Nov 19, 2008 5:22 PM EST{"commentId":4130177,"authorDomain":"MinnieApolis"}
{"commentId":4181956,"authorDomain":"adventurebooks"}
Archway was available all over the Puget Sound area, but I noticed that the cookie aisles over the last 18 months have been flooded with cheaper cookies enmasse. It may have been part of the problem.
Hope they don't come from China (competitive cookies).
{"commentId":4181956,"threadId":"384460","contentId":"1978456","authorDomain":"adventurebooks"}
- 3 votes
#11 - Sun Nov 23, 2008 11:39 PM EST{"commentId":4190945,"authorDomain":"MinnieApolis"}
{"commentId":5240438,"authorDomain":"pearlreapaf"}
You would think after what happen with Enron and Adelphia a company would not even think of playing with the company books but I guess some people are very slow learners. As a result the people who looked to them for a living and the people who anticipated their product are left out in the cold. I feel very bad for the workers of Archway but the management and the people who played creative accounting remember it is you who have ruined the lives of all those people who dedicated their lives to the company. I am so glad I am not you. I just have to get over the fact I will not be able to enjoy the apricot fill cookies any more.
{"commentId":5240438,"threadId":"384460","contentId":"1978456","authorDomain":"pearlreapaf"}
- 1 vote
#12 - Sat Feb 7, 2009 6:46 PM EST{"commentId":5241241,"authorDomain":"MinnieApolis"}
{"commentId":5243260,"authorDomain":"PamelaDrew"}
You would think after what happen with Enron and Adelphia a company would not even think of playing with the company books but I guess some people are very slow learners.
Sometimes there are winners in a financial collapse. It depends where the money went when it stopped going where it should. It is sad to see American classics vanish, but the subsidized, agribusiness food factories, have made every food sector, unprofitable, unstable and as unwholesome as %$#@. Archway oatmeal were my lifelong favorite, just perfectly chewey, mmm.
{"commentId":5243260,"threadId":"384460","contentId":"1978456","authorDomain":"PamelaDrew"}
- 1 vote
{"commentId":5243620,"authorDomain":"MinnieApolis"}
A brand new seed is coming up about Archway -- the cookies are coming back! Get your tastebuds ready! They're rehiring a second round of former employees.
Link: Lance ready to add workers
(Lance Inc. cookie co. bought Archway in the bankruptcy auction and rehired a small number of former workers just before Christmas. Now they are getting ready to ramp up production and resume making the Archway cookies. Oh joy!)
{"commentId":5243620,"threadId":"384460","contentId":"1978456","authorDomain":"MinnieApolis"}
- 1 vote
#13 - Sat Feb 7, 2009 11:54 PM EST{"commentId":6081377,"authorDomain":"melissax1972"}
happy happy joy joy happy happy joy!!!
{"commentId":6081377,"threadId":"384460","contentId":"1978456","authorDomain":"melissax1972"}
- 1 vote
{"commentId":6083858,"authorDomain":"MinnieApolis"}
{"commentId":6972736,"authorDomain":"sskea"}
I was a ID of Archway Cookies for 18yrs in Parkersburg WV. This was back in the 70's&80's. My route was taken from me in 1991.So this was under the original owners.Archway was a great place to be associated with in the beginning,but as time passed with new DM'S IT SOON WENT DOWNHILL.I'm so sorry for all of the fine ID'S and bakery workers that lost their jobs. I have many friends who work for Lance and I think you will better off with this Co.Good luck to all of you.I've had several heart attacks the 1st. being a month after my route was taken.To all my friends with Archway, I'm retired now and doing fine.GOOD LUCK!--eap.
{"commentId":6972736,"threadId":"384460","contentId":"1978456","authorDomain":"sskea"}
- 1 vote
#14 - Sat May 9, 2009 1:03 PM EDT{"commentId":6972800,"authorDomain":"sskea"}
G.ood Luck
{"commentId":6972800,"threadId":"384460","contentId":"1978456","authorDomain":"sskea"}
#15 - Sat May 9, 2009 1:08 PM EDT{"commentId":6979797,"authorDomain":"MinnieApolis"}
Hi, Earl. Thanks for checking in and leaving a message for your former associates and friends at Archway. Hope you are fine health-wise and enjoying the spring weather. Am sure your friends are glad to hear from you. Thanks again.
{"commentId":6979797,"threadId":"384460","contentId":"1978456","authorDomain":"MinnieApolis"}
#16 - Sat May 9, 2009 11:42 PM EDT{"canLink":false,"threadId":"384460","isPrivate":false}
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