In 1992 the Baldinger family sold a 50% interest to a large strategic partner operating numerous bakeries. The partner was now in the process of selling all of its bakeries and wanted to include Baldinger Bakery in the sale.
The family did not wish to sell but lacked the capital to buy out the partner. Substantial intercompany debt combined with recent losses resulting from the transition to a new, state-of-the-art bakery complicated the financing challenges. An additional factor was the inflexible structure of the New Markets Tax Credit financing that had been used to fund the new facility.
While not profitable the prior year, the company had turned the corner and was projecting strong performance.