American Candy, bank reach tentative agreement

Published 12:00 am Wednesday, June 12, 2002

American Candy Co.’s last day in court was scheduled to be Tuesday. Now it appears that the Selma company and Bank of America have apparently worked out an agreement.

Terms of the agreement are not clear as of yet. Gaylon Warrington, CEO of American Candy, was not be available to discuss the bankruptcy court proceedings.

“I’ll be in meetings all day with the bank,” Warrington said.

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Danny O’Brien, a clerk in bankruptcy Judge Margaret Mahoney’s court, said Bank of America and American Candy had worked out some sort of agreement and would present that settlement to Mahoney today.

“If something falls through, then they’ll schedule another hearing for next week,” O’Brien said.

Though American Candy and Bank of America have worked through some sort of settlement, it is unclear what that settlement will say. There is no guarantee that a settlement means the 102-year-old candy company will reopen.

“We’ll know something for sure [Wednesday],” O’Brien said.

American Candy filed under Chapter 11 of the Federal Bankruptcy laws last July. Since that time, the company has wavered between operating and sending employees home.

When the company first announced filing for bankruptcy, Warrington said Selma would eventually benefit from the move. He said American Candy was granted “debtor in possession” status.

“The DIP status will allow us to receive financing and protection from the previous creditors,” Warrington told The Times-Journal.

In July 2001, Warrington said the company would begin production again on Aug. 1. He also said the company had already begun purchasing more supplies and would operate three or four production lines, hiring back some of the workers who had previously lost their jobs.

Nearly a year later, things never worked out for the candy company.

On May 23, American Candy executives &045;&045; unable to secure financing for the company &045;&045; sent employees home and said they would return to work on June 3. That return never happened, and many employees have been out of work for three weeks.

According to union representative Daisy Todd, many of the displaced workers have already found new jobs. Others, she said, are still looking.