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About The Baker County press. (Baker City, Ore.) 2014-current | View Entire Issue (Dec. 23, 2016)
THE BAKER COUNTY PRESS — 3 FRIDAY, DECEMBER 23, 2016 Business & Ag Tasty Bake returns to former owners CONTINUED FROM PAGE 1 They claimed that Cereal Holding Company fraudu- lently misrepresented that it would make a signifi cant capital investment in Tasty Bake; that it would hire a qualifi ed sales team, to ex- pand the business; and that it would make every effort to grow, and to expand Tasty Bake. According to the Johnsons’s lawsuit, they sold Tasty Bake to Ce- real Holding Company in September 2014, for $500,000, requiring Cereal Holding Company to pay $275,000 in cash, and to execute a secured promis- sory note for the remaining $225,000. Cereal Holding Company gave the John- sons the mortgage deed for the Tasty Bake property, to secure the payment of the note. Up to $535,000 would be paid to the John- sons, in the form of earn- out, at 50% of the actual EBITDA (Earnings Before Interest, Taxes, Deprecia- tion, and Amortization), during the four years after the closing of the sale. The Johnsons claimed that Cereal Holding Com- pany paid only $29,625 on April 1, 2015, as the fi rst payment on the note, but this was $20,984.24 short, as the required payment was $50,609.24. The Johnsons claimed default on the note and mortgage, and sought foreclosure, with the principal amount, $203,250, plus interest, still owed. According to the Johnsons’s claim, after the sales contract was executed, Cereal Holding Company “...made little or (nor) effort to grow Tasty Bake or (to) even maintain Tasty Bake’s current busi- ness,” which resulted in a claim of damages, which the Johnsons said was $535,000. The Sheriff’s Offi ce foreclosure sale was ordered as part of the relief for the Johnsons. Baker County Assessor records show that the property was appraised at $312,950 in 2014, with personal associ- ated property appraised at $213,180. Peter was hired in Oc- tober 2014 by Cereal Hold- ing Company (the John- sons owned and operated Tasty Bake, from 2001 to 2014), as Tasty Bake Vice President, to assist with the ownership transition, for up to one year after the sale, and he would be reimbursed for regular ex- penses, such as meals and travel, associated with the business. The Johnsons claimed that Cereal Hold- ing Company breached the employment contract with Peter, and unpaid expenses were owed to him, in the amount of $1,960.93. An Order of Default for Failure to Appear was granted against the defen- dants, and then a judgment was awarded to the John- sons, on August 16, 2016, which included the follow- ing: $203,250, plus accru- ing interest, at the rate of 7% a year, from April 1, 2015, until paid, against defendant Cereal Holding Company; foreclosure of the mortgage, including a Sheriff’s Offi ce sale of the Tasty Bake property, to satisfy the judgment; an award of $535,000, against defendant Cereal Holding Company, in economic damages, for Fraud, and Breach of Contract; an award of $1,960.93, against defendant Cereal Holding Company, for Breach of Employment Contract; and an award, against defendant Cereal Holding Company, of all prejudgment interest of $14,227.50, and plaintiffs’ attorney fees, and other costs, as determined by the Court. In April 2016 (Tasty Bake’s issues were chronicled in the Friday, April 8, 2016, Friday, April 22, 2016, and Friday, Sep- tember 9, 2016 issues of The Baker County Press), the Johnsons, former Tasty Bake Plant Manager Curtis Taylor, and Tasty Bake President Yasar Samarah declined to speak about the issues at the time, or future plans for Tasty Bake, however, three food sales brokers for Tasty Bake did provide comments. These were Ken Lance, of Co- lumbia Pacifi c Brokerage, in Oregon; Matt Lindley, of Main Street Marketing, in Idaho; and John Portillo, of Portillo Sales & Market- ing, in Southern California. Both Lance and Lindley cited the cryptosporidium outbreak during July and August 2013 as the reason for the large reduction in Tasty Bake’s workforce at the time (there was an almost 100% reduction in the workforce earlier this year, also, with Taylor as the remaining employee), and the continuing issues, due to loss of distribution to clientele such as WinCo (Winning Company), a major Tasty Bake contract. Portillo, however, said that Tasty Bake was fully capable of continuing with its operation, even with the change in ownership at the time. “I think that (the crypto outbreak) has nothing to do with anything...That is a moot point...The new own- ers came in, acquired the company from the previ- ous owner (the Johnsons), and stopped shipping to anybody...They just stopped...And, why they did that, I have no idea... You don’t need to be de- stroying economies at all,” Portillo said. All three brokers noted the sudden halt in Tasty Bake’s distribution earlier this year, with a lack in communication to the brokers following that action. Portillo even noted that he understood that some former Tasty Bake employees were yet to be paid at the time, which he said was a serious violation of the law. Several former employees confi rmed this, and other details, related to the crypto outbreak, and unrelated, and they said that one day, they showed up to work, and had found that the doors were locked, and they were suddenly out of a job (the former employees had declined to provide their names earlier this year for an article, cit- ing likely retaliation from the ownership at that time). This left Taylor as the sole employee, to maintain the property, during the regular work week, until his resig- nation, on approximately October 20, 2016, accord- ing to court records. On Wednesday, Novem- ber 30, 2016, Tasty Bake, Inc., and Cereal Holding Company, represented by Portland-based Black Helterline LLP, fi led a motion for a Temporary Restraining Order (TRO), and a Preliminary Injunc- tion, to prevent the sale of the Tasty Bake property; a motion for Relief From Judgment; and a Motion To Dismiss, citing lack of jurisdiction. In requesting a TRO, the defendants argued that a court may grant the order, “When it appears that a party is entitled to relief demanded in a pleading, and such relief, or any part thereof, consists of restraining the commission or continuance of some act, the commission of which during the litigation would produce injury to the party seeking the relief.” In requesting relief from the judgment, the defen- dants argued that “...the judgment that was entered was void as a result of plaintiffs failing to provide defendants the opportunity to resolve the disputes through ADR (alterna- tive dispute resolution)... defendants are entitled to relief because the unfor- tunate circumstances that led to their being found in default constitute excus- able neglect...” On Friday, December 2, 2016, attorney Tim J. Helfrich, of Ontario-based Yturri Rose LLP, who represented the plaintiffs, addressed a letter to Baker County Circuit Court Judge Patricia Sullivan, criticizing the defendants for their “...desperate, last minute effort to enlist the court in further delaying the case...” and inform- ing Sullivan that critical information was omitted by the defendants, and that the plaintiffs would be submitting substantive material on December 2, in response. Helfrich said, “The Sheriff’s sale is scheduled for Tuesday. There is virtually no chance that anyone other than the plaintiffs would bid in that sale, considering the now rundown condition of this property, which is current- ly unprotected, and unsu- pervised. The defendants have a statutory redemp- tion period of six months, and the Sheriff’s sale is, therefore, a conditional, and not fi nal step in this process. It can go forward, still allowing defendants to get a hearing on their motion for relief from judgment...The security for their (the plaintiffs’) debt, which is now unattended, apparently uninsured, apparently not supplied with electrical power, is deteriorating and at serious risk. If it were to burn down or to be subsequently damaged by snowfall or rain on an inadequate roof, their security would be gone, and their only rem- edy would be to chase after corporations which have consistently failed to pay their bills, and meet their obligations.” Helfrich’s reference about the condition of the property is included in Yturri Rose LLP attor- ney Brian D. DiFonzo’s Declaration In Opposition To Defendants’ Motion For TRO, and in Peter’s mo- tion of the same, both fi led on December 2, 2016. According to court records, DiFonzo said that he had spoken with Taylor, and Taylor informed DiFonzo that there was a signifi cant roof leak in the building, with the possi- bility of water damage to the property, and that one of Taylor’s tasks was to energize pumps used for water removal, in order to avoid water damage inside the building. DiFonzo said that Taylor indicated that, one he had resigned, Taylor was unaware of anyone else who continued to perform this function, in order to avoid additional water damage. SEE TASTY BAKE PAGE 8 — Weekly Hay Report — Friday, December 16, 2016 — Eastern Oregon Prices trended generally steady in a limited test compared to week ago prices. Most demand lays with the retail/stable hay. According to some pro- ducers, horse owners prefer lower sugar, higher pro- tein hay. Many hay producers are looking forward to upcoming snow in the forecast as hay sales tend to increase as the snow comes. Tons Price Range Wtd Avg Alfalfa — Large Square Good/Premium 30 140.00-140.00 140.00 Alfalfa — Large Square Fair 650 95.00-95.00 95.00 Orchard Grass — Large Square Good/Premium 2 120.00-120.00 120.00 USDA Market News Service—AMS.USDA.gov — Cattle Market Report — Wednesday, December 14, 2016 Vale, Oregon Cattle sold through the auction: 2,513 Steer Calves 300-400# Bulk 151.00 - 172.00 Top 182.50 400-500# Bulk 144.00 - 175.00 Top 176.00 500-600# Bulk 124.00 - 153.00 Top 154.50 Heifer Calves 300-400# Bulk 135.00 - 152.00 Top 156.00 400-500# Bulk 125.00 - 142.00 Top 146.00 500-600# Bulk 109.00 - 127.25 Top 128.00 Yearling Steers 600-700# Bulk 121.00 - 132.75 Top 133.50 700-800# Bulk 115.00 - 128.00 Top 129.25 800-900# Bulk 109.00 - 117.00 Top 118.25 900-1,000# Bulk N/A Top N/A Yearling Heifers 600-700# Bulk 114.50 - 122.00 Top 122.50 700-800# Bulk 109.00 - 118.50 Top 119.75 800-900# Bulk 94.00 - 103.00 Top 104.00 900-1,000# Bulk N/A Top N/A Thin Shelly Cows 29.00 - 47.00 Butcher Cows 52.00 - 61.00 Butcher Bulls 43.00 - 55.00 Pairs Older N/A Hfretts. 73.00 - 88.00 Stock Cows Young - N/A ProducersLivestock.com 541-473-3136 — Log Price Report — Prices are based on the majority of saw mills in Northeastern Oregon and Central Idaho. The prices listed below are a composite prices of various saw- mills willing to visit with me about this topic. Ponderosa Pine—small diameter class 8-11 inches diameter class $250 per mbf. Only one sawmill was willing to buy small diameter pine at this time. Ponderosa Pine—medium diameter class 12-17 inches diameter class $300 to $350 per mbf Ponderosa Pine-large diameter class 18 plus inches diameter class $380 to $410 per mbf The Pine prices are still approximately $40 per mbf below average lumber/log market due to 2017 fi re salvage Doug Fir & Western Larch—$380 to $420 per mbf. Normal prices typically ranged between $425 to $475 per mbf. White Fir-$300 per mbf. Normal prices typically ranged between $340 to $360 per mbf. Engelmann Spruce—$350 at one Idaho sawmill, other sawmills including with White fi r prices. In general, the log prices still impacted from 2015 fi re season and fi re salvage that resulted. Sawmills are starting to get log yard inventory in line with sawmill production needs. With a new Administra- tion as of 1/20/2017, a more normal economic envi- ronment should result and hopefully a more healthy housing situation will result in a better climate for Northeast Oregon Sawmill and private forest land- owners. Tony's Tree Service Free evaluations for: • Proper Trimming • Safety • Removal •Disease Control • Insect Control • Tree Replacement • Stump Grinding Licensed | Insured | 48 years experience. Tony's Tree Service. Accepting payment plans and credit cards. Nearly fi ve decades of experience. 600 Elm Street, Baker City. 541.523.3708 Owners Tony & Lisa Constantine LCB 6271 • CCB 63504 Courtesy of Arvid Andersen, Andersen Forestry Consulting — Precious Metals Report — Price per ounce, USD Gold: $1,136.40 Silver: $16.14 Platinum: $919.31 Palladium: $664.85 Bloomberg.com — Ag Commodities — Corn: $350.50/bu/USD Wheat: $403.00/bu/USD Soybeans: $1016.75/bu/USD Oats: $223.50 bu/USD Rough Rice: $9.72/cwt/USD Canola: $521.20 CAD/mwt Live Cattle: $115.50//lb./USD Feeder Cattle: $125.85/lb./USD Lean Hogs: $64.00/lb./USD Bloomberg.com