BURLINGTON, VT. — Matthew Chaney, an employee of Vermont Bread Co., filed a class action complaint on April 29 in the US District Court, District of Vermont against Koffee Kup Bakery after the company abruptly closed last week.
In the complaint, Mr. Chaney is seeking $5 million on behalf of the company’s 500 “similarly situated employees” who were terminated on April 26 with no notice for damages in the amount of 60 days’ pay and ERISA benefits. According to the lawsuit, Koffee Kup failed to provide the employees 60 days advance written notice as required by the federal Worker Adjustment and Retraining Notification Act (WARN). As part of the WARN Act, companies with more than 100 workers are required to provide 60 days notice of a plant closing and mass layoffs of 50 or more workers at a single site.
Defendants in the lawsuit include Koffee Kup Bakery, a company that started in 1940 delivering bread by horse-drawn wagon; Vermont Bread Co., a subsidiary; and American Industrial Acquisition Corp., which on April 1 acquired a majority of the shares of Koffee Kup.
Koffee Kup Bakery, a manufacturer of baked foods, including bread, donuts and English muffins, served customers in the Northeast and Mid-Atlantic regions. The company had 500 employees across its three baking facilities located in Brattleboro, Vt.; Burlington, Vt.; and North Grosvenor Dale, Conn.
On April 1, American Industrial Acquisition Corporation (AIAC), a New York-based private equity firm, acquired Koffee Kup. In a statement announcing the acquisition, G2 Capital Advisors, which facilitated the transaction, said Koffee Kup was “in the process of repositioning its business to capitalize on a compelling platform of established brands, private label partnerships, long-term relationships with blue-chip retailers, and a vast distribution network,” adding, “The company sought a financial partner to accelerate its next phase of growth and profitability.”