A major U.S. industrial baker filed for chapter 11, facing rising costs for labor and materials and preparing to sell itself out of bankruptcy to investors and insiders that include its current CEO and private-equity backer, WSJ Pro Bankruptcy reported. Gold Standard Baking filed for chapter 11 with the U.S. Bankruptcy Court in Wilmington, Del., on Wednesday with more than $140 million in funded debt, some of which has been in default since 2020, court papers show. Chief Restructuring Officer John Young Jr. said in court papers the company lost $15 million in revenue and several historic customers after a 2017 Internal Revenue Service investigation cited about 230 of the company’s employees for lacking proper documentation. “As a result, these employees, many of whom had years of experience and were highly skilled, had to be transitioned from the business,” Mr. Young said in a declaration. Labor constraints worsened nationwide during the COVID-19 pandemic as worker scarcity became a fixture of the U.S. economy. Chicago-based Gold Standard was no exception, Mr. Young said. Higher costs for raw materials, such as flour and fats, along with rising expenses for aging machinery maintenance added more financial challenges, according to his declaration.
