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Operations at Schwebel’s to end, according to court filing

The Schwebel Baking Company’s efforts to find a new buyer have failed, and the company will halt operations.

The news came out of an hourlong telephone status conference Wednesday morning with U.S. District Judge David A. Ruiz in U.S. District Court, Youngstown.

“Extensive discussion occurred,” according to minutes of the proceeding released by the court. “Notably, Defendant’s discussions with a potential buyer have come to a close, and the company is proceeding with a wind-down of its operations. In addition, a secured creditor of Defendant just filed a lawsuit seeking to enforce its security interests in substantially all of Defendant’s property. Defendant indicates said creditor intends to seek the creation of a receivership.”

Earlier this week, Spectrum Commercial Finance of Bloomington, Minnesota, filed suit to recoup $3.76 million. If its projections hold true, all of Schwebel’s assets will be liquidated by Sept. 26.

“Our legal team is reviewing that lawsuit as we continue winding down the business,” a Schwebel’s spokesperson said Wednesday in an email. “We have not communicated any closing dates to our employees. We would prefer not to comment further at this time.”

Teamsters Local No. 52, the lead plaintiff in a civil suit against Schwebel’s, agreed to pause litigation July 7. During the status conference with U.S. District Judge Donald C. Nugent, Schwebel’s attorney said it was pursuing new ownership. As part of the process, it would seek an expedited Chapter 11 bankruptcy. Schwebel’s did not file the necessary paperwork during the eight-day time frame.

The move was in response to Schwebel’s announcement on June 16 that it was closing its baked goods operations and outlets in Ohio, Pennsylvania and New York.

A week later, Schwebel’s entered into a forbearance agreement with Spectrum to pause payments on an approximately $5.4 million credit agreement. The principal owed, according to court papers, is $3.7 million. Neither amount includes interest, expenses or legal fees.

Under the agreement, Schwebel’s was required to pay the loan in full by Aug. 8. The original agreement was signed in February 2025.

The forbearance gave Spectrum a security interest in all of Schwebel’s property, including equipment, inventory and accounts. Spectrum said Schwebel’s did not abide by the contract’s terms.

“Sprectrum has all rights and remedies of a secured party, including the right to take possession of the Collateral and dispose of the Collateral in a commercially reasonable matter,” the company’s attorneys said in court paperwork.

Spectrum filed a projected 13-week window budget with the court. The dollar amounts were blacked out. The end date is Sept. 26.

A status conference with the Teamsters and Schwebel’s will take place at 1 p.m. July 21.

Operations at Schwebel’s to end, according to court filing

The Schwebel Baking Company’s efforts to find a new buyer have failed, and the company will halt operations.

The news came out of an hourlong telephone status conference this morning with U.S. District Judge David A. Ruiz in U.S. District Court, Youngstown.

“Extensive discussion occurred,” according to minutes of the proceeding released by the court. “Notably, Defendant’s discussions with a potential buyer have come to a close, and the company is proceeding with a wind-down of its operations.

“In addition, a secured creditor of Defendant just filed a lawsuit seeking to enforce its security interests in substantially all of Defendant’s property. Defendant said creditor intends to seek the creation of a receivership.”

Earlier this week, Spectrum Commercial Finance of Bloomington, Minnesota, filed suit to recoup $3.76 million. If its projections hold true, all of Schwebel’s assets will be liquidated by Sept. 26.

“Our legal team is reviewing that lawsuit as we continue winding down the business,” a Schwebel’s spokesperson said in an email. “We have not communicated any closing dates to our employees. We would prefer not to comment further at this time.”

Read more in Thursday’s print edition of The Vindicator or check vindy.com for updates.

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