A group of local investors, led by Myrth York, plan to buy the bankrupt Newport Creamery chain for $570,000. The deal, which does not include the company’s real estate, will need approval from the U.S. Bankruptcy Court.
Andrew Richardson, the trustee appointed by the court to find an owner or liquidate the chain’s assets, last week recommended to the court that the group’s offer be accepted.
Beyond Cash Donations: How New Forms of Giving Are Transforming Not-for-Profit Accounting
Evolving Funding Landscape for Not-for-Profits Not-for-profit organizations are being asked to do more with less,…
Learn More
York said her plan would save the jobs of 500 employees in Rhode Island and Southeastern Massachusetts.
In 1999, when Newport Creamery was last sold, it went for approximately $8 million.
York, who has run twice unsuccessfully for governor and might run again in 2002, points out that while $570,000 seems like a steal, there are several major issues that needed to be resolved, including getting leases to real estate and investing enough cash to get the restaurants rolling again.
She would not comment on how much her group is willing to invest in the chain.
“I can tell you that we are prepared to make any reasonable, responsible investment to move forward with this,” York said.
Newport Creamery declared bankruptcy in June. Under control of its owner, Robert Swain, the company ran up more than $10 million in debt. After the courts turned the company over to Richardson, he closed all but 12 of the 31 restaurants.
York said an attempt by her group to buy five of the 12 store properties from an Arizona-based subsidiary of Swain’s was rejected. She said they offered $2 million to purchase the property.
Leasing those properties from the subsidiary won’t be easy, she said.
“As for the lease, I think that will be challenging. Obviously, Newport Creamery has played an important role in Rhode Islanders’ lives. An out-of-state corporation doesn’t have that same appreciation,” she said.
York is a financial investment advisor at York Resources, Inc., a multi-million dollar financial investment company owned by her family.
Along with York, investors in the deal are Rory Riggs and Jack McConnell. Riggs, a Rhode Island native who now lives in New York, helped build Biomatrix, a developer, manufacturer and marketer of biomedical products. McConnell is a partner in the Rhode Island office of the national law firm of Ness Motley Loadholt Richardson & Poole.
A court hearing on the proposed deal is scheduled for Nov. 27 before U.S. Bankruptcy Court Judge Arthur Votolato. During the hearing, the investors will have to show they have the finances to successfully take over the company.
