Marcus Lemonis, the CEO of Camping World and Good Sam Enterprises who is best known as the host of CNBC's turnaround show, "The Profit," has teamed up with Fischer Enterprises LLC, which bought Dippin' Dots out of bankruptcy in 2012, to buy New York cupcake chain Crumbs Bake Shop Inc. out of bankruptcy.

Crumbs closed all of its stores on July 7, and had previously received a loan from Fischer. The store closures triggered a default on the loan.

The bakery had been closing stores before the Nasdaq delisting, and had 49 stores left when it ceased operations. For more on the company's struggles, see "Crumbs Sweetens Plan with Loan from Dippin' Dots Owner." 

Crumbs landed on Mergers & Acquisitions Distressed Company Watch List after the bakery’s accountant raised doubts about its ability to continue as a going concern, or without the threat of liquidation.

Crumbs CEO Edward Slezak told Mergers & Acquisitions that Crumbs would consider a sale. "Our focus in any potential M&A transaction would ideally be with a strategic partner," Slezak said earlier in the year.

For the acquisition, Marcus Lemonis LLC, the investor’s holding company, and Fischer have formed a joint venture called Lemonis Fischer Acquisition Co. LLC, and will provide debtor-in-possession financing for Crumbs bankruptcy case, which was filed in the U.S. Bankruptcy Court for the District of New Jersey in Newark on July 11. Judge Michael Kaplan has been assigned to the case.

The JV says it has provided pre-petition secured financing so that Crumbs can get through its Chapter 11 case. The group also plans to buy Crumbs' assets, but a sale would need to be approved by the court. A sale motion has not been filed with the bankruptcy court yet.

If the acquisition is successful, Lemonis Fischer would reopen Crumbs stores and re-employ the chain's workers. The company's product mix would also be diversified, the JV says in a statement.

Before closing, the bakery had pushed its products beyond Crumbs shops through agreements with BJ's Wholesale Club, White Coffee, PKP-Mystic Apprel, Pop!Gourmet Popcorn and Pelican Bay. It had also switched up its product mix to include snacks other than cupcakes, and started offering Dippin' Dots in stores.

As of Dec. 31, Crumbs and its subsidiaries had $20 million in assets and liabilities of $19 million. Crumbs estimates that it has between $1 million to $10 million in assets and liabilities. The company's largest unsecured claims listed on the petition are IA Clarington Global Tactical Income Fund (owed about $1.84 million), Kitchener Investment Corp. (owed about $1.5 million) and Cannell Capital LLC (owed about $1 million).

Oklahoma City-based Fischer bought Dippin' Dots out of bankruptcy in 2012. The group gave Crumbs a $5 million loan in two tranches, most recently in January.

Lemonis also is the chairman and CEO of Camping World and Good Sam Enterprises. "The Profit" is a show about saving small businesses.

Michael Sirota, David Bass and Felice Yudkin from Cole Schotz Meisel Forman & Leonard PA are proposed debtor counsel.

For more on Crumbs, see "Crumbs Closes All Stores as Crumbnuts Fail to Revive Chain." For more on struggling companies, check out the latest edition of Mergers & Acquisitions Distressed Company Watch List


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