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