Chip Co. on the Old Block
Bankrupt Jays to be acquired by Snyder's of Hanover
CHICAGO -- A U.S. Bankruptcy Court Judge on Wednesday approved the $24.8 million sale of Jays Foods Inc. to Pennsylvania snack food maker Snyder's of Hanover, rejecting a Chicago businessman's last-minute effort to assemble rival bid that would keep Jays South side plant open, reported The Chicago Tribune.
The plant, which has produced the iconic Chicago potato chip for decades, is slated to close today. Snyder's of Hanover will retain Jays brands, but does not intend to use the South side chip factory, said the report.
Lawyers [image-nocss] for Wallace Sims Jr., a retired banker, urged Judge Pamela Hollis to extend the bidding deadline for Jays, which came and went late last week. Michelle Harris, an alderwoman whose district includes Jays, was in court supporting Sims effort, pledging more than $4 million in city tax subsidies to help Jays if Sims became the new owner.
Sims lawyers argued that he was not given enough time to mount a bid. Jays' attorneys argued the opposite, and claimed that if the bidding deadline was extended, Snyder's could walk away from the deala disaster for Jays' creditors. Jays' major creditors supported the Snyder's bid.
Hollis seemed sympathetic to the job losses incurred in the Snyder's deal. But she said bankruptcy rules would not allow her to extend the deadline, unless Sims' investor group could guarantee it could cover the losses if Snyder's backed out, among other things. It could not.
"As much as I'd like to assume the position of the mayor of Chicago and protect jobs, my job is different," Hollis said in court. Her job, she went on, was to look out for creditors. "If Snyder's walks away, this entire thing blows up," she said.
Snyders will continue to operate Jays' South side warehouse and distribution facility, which employs another 420 people. Snyder's has said it also plans to operate a Jays' plant in Jeffersonville, Ind.