Beloved Home-Grown Ice Cream Company, Ample Hills, Seeks a BuyerMarch 24, 2020
On March 15, 2020, Ample Hills Holdings, Inc. and its affiliates (“Ample Hills”) commenced bankruptcy proceedings, seeking to sell substantially all of the company’s assets under chapter 11 of the Bankruptcy Code. Ample Hills is a beloved Brooklyn-based ice cream company that currently operates 10 stores primarily in the metropolitan New York area and a state-of-the-art factory in Red Hook, Brooklyn. Ample Hills intends to find a purchaser, who will enhance the founders’ vision for the playful brand, preserve jobs, and maximize the value of the company’s assets.
Ample Hills’ counsel, Herrick, Feinstein LLP, has carefully navigated the company’s landing into the unchartered territory of the bankruptcy world today. Ample Hills is one of the last cases to file under the old regime and one of the first to face the new paradigm of temporary restrictions on business operations due to the ongoing coronavirus pandemic. The company intends to use its cash collateral to implement an auction to sell its assets free and clear under section 363 of the Bankruptcy Code. Approving the company’s request to use its use cash collateral on an interim basis, Judge Lord of the U.S. Bankruptcy Court for the Eastern District of New York observed that Ample Hills is much more than a business – it is passion, heart, soul, creativity, and a story of success.
Ample Hills was founded in 2010 by Brian Smith and Jackie Cuscana, who, through ice cream, sought to celebrate creativity, playfulness, and the pursuit to feel like a kid again. Brian and Jackie started from a push cart in Prospect Park, Brooklyn, and one year later, opened their first store in Prospect Heights, Brooklyn. The Prospect Heights’ store sold out of ice cream in just four days, prompting the New York Times to publish an article entitled So Successful, a New Ice Cream Shop Closes After 4 days. Following the initial success, Ample Hills expanded into other areas of New York, New Jersey, California, and Florida (including on Disney’s Boardwalk in Orlando). Former Disney CEO, Bob Iger, was one of Ample Hills’ first customers, who became a champion of the brand and introduced the ice cream to Steven Spielberg, Tim Cook, Howard Schultz, and Oprah Winfrey, among others.
While the majority of Ample Hills’ revenue comes from its retail stores and kiosks, the company also operates a retail mail order business through its website, a wholesale business that primarily sells to grocery stores and specialty retailers, and a catering and special events business. Over the years, Ample Hills has received a number of accolades, awards, and accomplishments:
- Ample Hills was named the best ice cream shop in the country by the FOOD NETWORK in 2018.
- The Huffington Post named Ample Hills’ flavor THE MUNCHIES the “#1 Ice Cream Flavor in America.”
- Zagat named Ample Hills the best ice cream shop in New York City three years in a row.
- Oprah Winfrey called Ample Hills “a spoonful of heaven” in naming the ice cream one of her Favorite Things.
- Ample Hills has been featured on The Today Show, CBS This Morning, Good Morning America, and The View.
- Ample Hills created a custom flavor for Jimmy Kimmel (Bananas for Brooklyn), which he featured live on his late-night show.
- Ample Hills celebrated Mickey Mouse’s 90th birthday with three custom flavors, complete with custom packaging featuring original Mickey Mouse comic strips that told the story of Mickey Mouse through the years (1928, 1958, and 2018).
- Ample Hills collaborated with Marvel to create three superhero ice cream flavors. Ample Hills created original Black Panther, Captain America, and Spider-Man comics that wrapped around the pint containers.
Significantly, Ample Hills’ stores are profitable and have continued to generate a positive cash flow over the years. The company has experienced liquidity restraints, however, resulting from the build out of its factory, where ice cream is produced. In the chapter 11 proceedings, Ample Hills has filed a motion for approval of expedited bidding procedures for an auction, pursuant to which strategic buyers and investors in distressed assets are invited to express their interest by April 13, 2020. Subject to the bankruptcy court’s approval, the milestones include submission of bids between May 8-12, 2020, and an auction to take place on May 14, 2020.
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© 2020 Herrick, Feinstein LLP. This alert is provided by Herrick, Feinstein LLP to keep its clients and other interested parties informed of current legal developments that may affect or otherwise be of interest to them. The information is not intended as legal advice or legal opinion and should not be construed as such.