The company that drove Dean & Deluca into bankruptcy is offering $10 million for another shot at running the gourmet grocer, The Post has learned.
Thailand-based real estate company, Pace Development, which sunk millions into a failed Dean & Deluca expansion before filing for Chapter 11 bankruptcy protection in April, outlined its plan for a second chance at selling $165 jars of caviar and other high-priced goods in a Manhattan federal court filing this week.
The plan calls for $5 million of a $10 million investment to be used to pay off $26.5 million owed to vendors and other creditors, court papers show. The company didn’t say what it will do with the remaining $5 million, but it will presumably use the money to relaunch stores, experts said.
“Dean & Deluca over expanded and lost what made them special,” distressed debt experty Adam Stein Sapir told The Post. “But if they can bring it back to its former glory with a smaller footprint, it has a lot of potential.”
The company, founded in Manhattan’s Soho neighborhood in 1977, filed for bankruptcy protection on March 31 at the start of the coronavirus pandemic. But it’s problems started well before then.
After buying the grocery for $140 million in 2014, Pace plowed $240 million into expanding it around the world at a time of growing competition in the gourmet food industry. By 2018, upscale vendors like Ceci Cela Patisserie and Elenis bakery had sued Dean & Deluca for not paying its bills, and by mid-2019 Pace shuttered all of its owned retail outlets and its e-commerce website.
By last year, the company’s franchisee-owned stores were its only source of income — but even that spigot has dried up, the filing said. Just two stores, both in Honolulu, remain open and neither has paid Pace royalty fees for months, the company lamented.
Ceci Cela Patisserie owner, Laurent Dupal, who last year received $30,000, or about half of what he was owed by Dean & Deluca, told The Post he would consider doing business with the company again if he is paid on delivery. If other vendors follow suit, that could limit Pace’s ability to reopen more than just a handful of stores.
“A company like mine would take any business that comes in front of us right now,” Dupal said. We are not being picky, but we would ask for payment on delivery if Dean & Deluca approached us and I’d suggest that all companies that would work with them do the same so the pressure is on and no one gets screwed again.”
Pace’s court filing failed to detail how many Dean & Deluca stores it might reopen, but acknowledged that its brand has plummeted in value due to the mass store closures. The company now values the brand at $12 million down from the $55 million it had claimed when it filed for Chapter 11.
“The value of the intellectual assets have declined materially,” the filing said.
The filing said the reorganization would reduce the grocer’s debt, much of which is owed to Pace, from $311 million to $11 million. If the reorganization plan is not approved, however, Dean & Deluca could be forced to file a Chapter 7 liquidation.
That would be sad end to the legacy left behind by Joel Dean and Giorgio DeLuca, who’s first store quickly earned the nickname “museum of fine food” for its mouth-watering displays of exotic goods, which back then included things like radicchio, balsamic vinegar and sun-dried tomatoes — all first introduced in the US at Dean & Deluca, the grocer has claimed.
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