Crumbs Bake Shop $CRMBQ to liquidate

Despite the huge run up in the shares of Crumbs Bake Shop (CRMBQ) on the news that Crumbs has reopened one of their shuttered stores and will reopen a bunch more soon, Crumbs Bake Shop Inc no longer has anything to do with the Crumbs stores or brand and will not benefit from the store openings. In fact, Crumbs Holding Company (CRMBQ) filed a motion (PDF) on October 1st to change from chapter 11 bankruptcy to chapter 7 (liquidation) and stated in the application that:

The Debtors no longer maintain active business operations and have only operated their businesses for the purpose of maximizing the value of the Debtors’ assets, resolving certain claims and winding down their affairs for the benefit of the Debtors’ creditors. The Debtors’ remaining assets include, among other things, potential causes of action including, among others, avoidance actions under the Bankruptcy Code. The Debtors have determined that the best interest of all creditors will best be served by converting these
Chapter 11 cases to cases under Chapter 7 of the Bankruptcy Code so that a Chapter 7 trustee may investigate and pursue those causes of action to maximize recoveries while reducing the continuing costs of the administration of these estates.

Up to date filings in the bankruptcy case can be found on the trustee’s website.

Unlike the last news spike on the completion of the sale of essentially all of Crumbs’ assets to Lemonis-Fischer Acquisition Company (LFAC), I did not immediately short the spike. I would really love to short CRMBQ now as its price action is toppy but my brokers will not let me short it for some reason that I cannot fathom.

See my previous blog posts on CRMBQ:
Owners of CRMBQ no longer own Crumbs Bakeshop
The end is near for Crumbs Bakeshop

crmbq

Disclosure: I am short CRMUQ and I am a day-trader. I may close my short position or short more at any time. I am actively looking to short CRMBQ. I have no relationship with any parties mentioned above. This blog has a terms of use that is incorporated by reference into this post; you can find all my disclaimers and disclosures there as well.

 

4 thoughts on “Crumbs Bake Shop $CRMBQ to liquidate”

    1. Sorry — APP is an interesting situation but my time is quite limited at present. I have only kept posting on Crumbs because I read through all the important court docs a few months ago.

    1. I don’t think anything has substantively changed. One of the bakeries that had a licensing agreement with Crumbs made a filing arguing that LFAC did not purchase that intellectual property in its purchase but I don’t see how shareholders would get anything from this even if that bakery won. Friday at 10am is the hearing to change from Chapter 11 to Chapter 7. After that happens I would expect the stock to drop. I have been shorting some CRMBQ in anticipation of that (unfortunately my CRMUQ short was bought in by IB).

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