Van de Kamp’s Files for Bankruptcy Under Chapter 11

After 75 years of serving up goodies to generations of Southern Californians, Van de Kamp’s Holland Dutch Bakers has filed for bankruptcy law protection.

The privately held company continues to operate out of its landmark Dutch-style bakery uilding in Glassell Park, northeast of downtown Los Angeles, but has laid off more than 100 employees and owes back pay to many that remain, union representatives said Tuesday. Company officials are asking the unions to make concessions to keep the firm going.

The bankruptcy filing was brought about by several factors, including slow summer sales, high labor costs and some extraordinary losses last year because the change to a new computer system disrupted deliveries, said David A. Gill, bankruptcy lawyer for Van de Kamp’s.

Calls to Van de Kamp’s President Robert Schott and its owner, Simon S. David, were not returned Tuesday. David also owns a Carson-based real estate firm called Interstate Consolidated Industries.

The baking company’s unions had another explanation for Van de Kamp’s problems.

“It’s been run into the ground by the present management,” said Bill Walton, president of Bakery, Confectionary & Tobacco Workers Union Local 37, which represents most of the unionized employees. “It’s a sad story because Van de Kamp’s is a good company and a good name.”

Kenneth Young, an attorney for the Teamsters union, which represents another 60 employees at the company, said, “There’s no doubt that, if the current management stays in, the company will be out of business maybe in a matter of weeks.”

Gill said management has projected that it has enough money to continue operating the company. Despite the unions’ harsh words, “Our principal secured creditors and the unions are being most cooperative in keeping the company alive,” he said.

In a Chapter 11 bankruptcy petition filed Aug. 31, Van de Kamp’s listed assets of $15.03 million and liabilities of $42.7 million. Under Chapter 11, a company continues to do business but is protected from its creditors while it works out a plan to pay its debts.

The company’s largest creditors are Security Pacific National Bank, which is owed about $5.5 million, and the Internal Revenue Service, which is owed about $2.5 million.

Van de Kamp’s laid off about 125 of its nearly 500 employees late last month, just before the bankruptcy petition was filed, Walton said. About 140 employees are owed two weeks pay, he said.

Gill said Van de Kamp’s is meeting its current payroll, and U.S. Bankruptcy Court Judge Robin L. Riblet has given the company authority to pay some of what it owes employees. When a company is operating under Chapter 11, the court must approve all major expenditures.

The company is seeking temporary relief from its collective bargaining agreements, including suspending contributions to the employees’ medical and dental plans and eliminating vacation pay and sick leave pay, Young said.

Riblet has given the company and the unions until Friday to negotiate some sort of settlement. Riblet has indicated that she will grant a 30-day suspension of the contracts if no other agreement is reached, he said.

“Obviously, the employees are very discouraged and very angry,” said Young, the Teamsters’ attorney. “The company is 75 years old, and they have employees that have been there 25 or 30 years, who grew up with the company.”

Van de Kamp’s Holland Dutch Bakers, with its trademark blue windmills, was founded in 1915 by brothers-in-law Theodore J. Van de Kamp and Lawrence L. Frank, uncles of California Atty. Gen. John K. Van de Kamp. The Van de Kamp family sold its interest in the company more than 20 years ago.

In recent years, Van de Kamp products have been sold mostly in supermarkets.

A separate company under different ownership produces Van de Kamp’s frozen foods.