Munchery, the prepared meal delivery startup that filed for bankruptcy in March, has sold its 70,000-square-foot South San Francisco headquarters to airline food supplier Gate Gourmet, the SF Business Times reports. It’s good news for Munchery’s CEO James Beriker, who plans to pay himself a $250,000 “success fee” for the sale of the company’s headquarters and other assets to Gate Gourmet. But money from the $5 million sale is unlikely to make it to the small food businesses to which Munchery still owes millions.
The US Trustee overseeing the company’s bankruptcy proceedings might have something to say about that, however. That trustee will dispute the settlement terms, the Business Times reports, terms that also include an $18,000 per month salary for Beriker (half his previous $36,000 per month compensation).
When Munchery, which once raised $125 million in funding, shut down suddenly in January, it did so without so much as notifying vendors like Three Babes Baking Company. Munchery hadn’t paid the pie company for months, and owed it $20,000 — money the woman-owned company is unlikely to receive.
According to bankruptcy filings, Munchery owes about $34 million in total: $6 million to secured creditors — people including wealthy celebrities like Jared Leto and Olivia Munn — who will be paid first, then $22 million in convertible notes, to be paid second. At the bottom of the payment structure, Munchery owes another $6 million to unsecured creditors like Three Babes Bakery and its owner Lenore Estrada.
To Estrada, it’s “astounding” that the CEO of a bankrupt company should receive half her annual salary every month, plus a “success fee.” “Knowing that the company was about to close, [Beriker] personally collected hundreds of thousands of dollars while running up similarly sized debts by ripping off small business owners and consumers,” Estrada says. “Every penny of that money should go towards paying back the consumers and vendors who are getting nothing.”
- Bankrupt Munchery’s assets sold off as challenge to CEO’s salary looms in court [SF Business Times]