Local effort to buy Jay's fails

December 5, 2007 6:49:57 AM PST
A tough holiday season may be ahead for more than 200 workers at the Jay's food plant on Chicago's South Side.They are losing their jobs after a bankruptcy judge approved the sale of the company Tuesday. The Chicago plant should close Wednesday.

A bankruptcy court judge denied a local businessman's request for more time to raise money to buy Jay's and keep 640 jobs in Chicago. The denial meant that Jay's potato chips and other snacks will no longer be manufactured in the city that made them famous.

For 220 Jay's production workers, it was their next-to-last day on the job. The landmark plant on 99th Street will be closed by its new owner, Pennsylvania-based snack maker Snyder's of Hanover.

"It hasn't hit until the doors are closed but everybody is out of a jab on Thursday," said Ronald Young, 26-year Jay's employee.

Jay's -- founded in the 1920s -- filed for bankruptcy October 11. An acquisition group representing Snyder's began efforts to buy the company a few days later.

In federal court, lawyers representing dozens of Jay's creditors, including potato farmers, supported the pending $24.8 million sale. Then attorneys for Chicago businessman and retired banker Wallace Sims tried to stop the deal by asking the court for more time to put together a better offer that would keep the Chicago plant open.

"I think we had the cure for the patient. But we just couldn't get to the patient soon enough," said Gary Grasso, attorney for Sims.

Judge Pamela Hollis denied the motion after asking Grasso, "Are your clients willing to pay all the administrative expenses that would be caused by this extra time?" Sims, who reportedly had lined up former Bears coach Mike Ditka as a possible investor, could not make the required guarantees and said he believes the Snyder's deal was made before the bankruptcy filing.

"From the very outset it was a cooked deal, cooked meaning done deal," said Sims.

Alderman Michelle Harris called the eminent loss of the 8th Ward's largest employer "devastating."

"We have residents in the community and the city at large that are going to be affected by the biggest employer within the 8th Ward, which is Jay's. It's a snowball affect, and it will affect tons of people," she said.

A Jay's statement said Snyder's will keep 420 workers at the South Side plant's warehouse and distribution center. But they will be there only for "an unspecified period of time."

As far as we know, Snyder's does not plan to change the brand name. Jay's chips will still be on the shelves in stores. They're just not made in Chicago after Wednesday.