Lancaster County-based Food Management Systems Inc. acquired bankrupt confectioner Wolfgang Candy Co. today, fending off a last-minute verbal bid from rival Divine Serendipity.
The key for the bank: Food Management was able to pay the $1 million immediately.
"The money is in the (escrow) account right now," M&T attorney Michael Nord said. "The bank will be wired $1 million today."
The purchase does not include real estate; Food Management will lease the property from Wolfgang.
Wolfgang's previous suitor, Divine Serendipity, owned by Alabama businessman Wayne Sellers, made a verbal offer of $1.2 million this morning, promising a deposit of $100,000 and the balance by Oct. 22, provided certain conditions were met.
However, Wolfgang and M&T Bank preferred the certainty of cash in hand, and their attorneys questioned Divine Serendipity's ability to follow through, given its record so far.
Divine Serendipity received Judge France's approval in August to buy Wolfgang but failed to pay the $885,000 purchase price or $10,000 monthly lease, leading her to cancel the sale last week.
"They still don't have the cash," Nord said in court this morning. "This proposal is unacceptable … for many, many reasons."
Food Management will immediately provide Wolfgang $230,000 to $250,000 in cash for operations, President Michael Stillman said.
Wolfgang has been operating on a shoestring budget, leading to delayed shipments and canceled orders, and the cash infusion will let the company get back on track, President Benjamin McGlaughlin said.
Food Management tentatively plans to have the McGlaughlin family invest $150,000 in the business, Stillman said, saying Food Management likes to employ managers who have "skin in the game."
"I'm very glad to invest in a company I think has a bright future," he said after the hearing.
Sellers praised Wolfgang and said he wishes it and its workers all the best.
"I didn't get it. … The other company got it," he said.