Crumbs Bake Shop announced that the U.S. Bankruptcy Court for the District of New Jersey approved all of the first day motions related to its voluntary Chapter 11 process initiated July 11, 2014, and outlined bid procedures that the company will ask the court to approve in connection with a court-supervised auction process under §363 of the Bankruptcy Code.

Among the approved motions, the court granted Crumbs access to DIP financing from Lemonis Fischer Acquisition, a joint venture created by Marcus Lemonis and Fischer Enterprises to help ensure the company can meet its financial obligations throughout the Chapter 11 case.

“This is an important milestone in the Chapter 11 process, and we thank the court for its careful consideration of our requests,” said Edward M. Slezak, Crumbs CEO and general counsel. “We are confident that Crumbs is taking the right steps to protect the brand and position the company for long-term success. We are evaluating the company’s retail strategy with the goal of reopening select Crumbs locations. Further, we intend to take time during this process to continue the strategy our team had put in place in the past year focused on licensing and franchising opportunities, given the success we had in signing new licensees for our baked goods, as well as introducing new products including Crumbs branded bake mix, bakeware, coffee and gourmet popcorn. After carefully evaluating opportunities to strengthen Crumbs’ financial position, we continue to believe that pursuing a sale transaction through this process will ensure a strong future for the Crumbs brand and business. By evaluating all offers for Crumbs through a court-supervised auction process, we can be sure we are achieving the best possible outcome for the business and our stakeholders.”

The first day motions approved by the court collectively will enable Crumbs to maintain current operations as it pursues a sale through the Chapter 11 process.

The court also approved motions giving Crumbs authority to pay employee wages and benefits as usual throughout the Chapter 11 process. Additionally, Crumbs was granted approval to close certain retail locations.

The company also outlined the sale transaction timeline it will formally present to the court on July 24, 2014, including proposed bid procedures and an expected date for an auction and sale hearing that will determine the best offer to acquire substantially all of Crumbs assets. As part of the Chapter 11 process, other potential buyers will have the opportunity to submit bids to acquire Crumbs, with Crumbs set to ask the court to approve a bid deadline of August 19, 2014. If other qualified bids are received ahead of the deadline, those will be evaluated by Crumbs, its advisors and the court in a court-defined auction process.

Previously on abfjournal: Bankruptcy Judge Puts Crumbs on Fast Track to Sale, July 17, 2014