The New England Confectionery Co., creator of the iconic Necco wafer, and the oldest continually operated candy maker in the United States may soon be closing its doors. Three businesses that are each allegedly owed hundreds of thousands of dollars by the wafer-maker are reportedly asking a Massachusetts court to force the struggling company into bankruptcy. Could this spell the end of the chalky wafers and other confectionary delights we all so love to hate?
Necco Wafers, Mary Janes, Clark Bars, Squirrel Nut Zippers, and Sweethearts – those Valentine’s Day goodies with little messages written on them – are some of the most polarizing treats out there. You either can’t live without them, or you can’t stand them. But they have stood the test of time. Their maker, the New England Confectionery Co. has been in business since before the Civil War.
However, the iconic candy company is in trouble. The Boston Business Journal is reporting that the company’s debtors have filed a petition seeking to force the company into involuntary bankruptcy. The business is now looking for a buyer that will save them, and a former CEO has set up a GoFundMe account in hopes of raising the $20 million he claims is necessary to save Necco wafers.
Being forced by creditors to file for bankruptcy is somewhat uncommon in this day and age, when businesses and people can voluntarily file for a reorganization bankruptcy and use the process to get their affairs in order, but involuntary bankruptcy is obviously not dead.
Involuntary bankruptcies are a way for creditors to protect themselves when they think a company is on shaky financial footing, or when a company is believed to have the ability to pay its creditors, but for some reason is refusing to do so.
If a company has more than 12 creditors, at least 3 of the creditors must band together to file a bankruptcy petition. If a company has fewer than 12 creditors, a single creditor can push for bankruptcy. Either way, additional creditors can join the case as it progresses.
Businesses have the right to respond to and fight a petition for involuntary bankruptcy, which is what the New England Confectionery Co. is doing now. If they cannot find a buyer, the court will decide if the creditors’ petition should be granted. If so, things will proceed as if this is a typical, debtor-filed action.
No matter what your opinion on Necco wafers, it will be interesting to see how this case turns out. The search for a buyer, and the attempt by the former CEO to crowd-fund a purchase mean everything is playing out very publicly. Plus, fears that Necco wafers will be no more has caused people to start stockpiling the snack. This is definitely a case to keep an eye on if you are a creditor of a well-known brand.