Food52: Avidbank Cash Sweep Triggers 363 Sale After 98% Valuation Decline

Food52, Inc., the Brooklyn-based food and home media company, filed chapter 11 on December 29, 2025 in the U.S. Bankruptcy Court for the District of Delaware. The First Day Declaration describes a December 15, 2025 cash sweep by secured lender Avidbank that eliminated operating liquidity and forced immediate layoffs, while Business of Home reported deep headcount reductions across Food52 and Schoolhouse. The company is pursuing a section 363 sale with America's Test Kitchen, through its affiliate F52, LLC, as stalking horse bidder and DIP lender under a compressed sale timeline.

The First Day Declaration also describes a prepetition marketing process that included outreach to 211 potential buyers or investors, 35 nondisclosure agreements, and seven indications of interest by December 11, 2025, but only one actionable proposal after the cash sweep. America's Test Kitchen's proposal included emergency funding and a 35-day sale process, which the board approved as the path to preserve operations.

Food52 grew from a recipe community into a commerce-led media company and expanded into home goods through the Schoolhouse acquisition and the Dansk acquisition, both completed in 2021 after a TCG investment round.

Restructuring and Section 363 Sale

DIP financing. The debtor's DIP Financing Motion describes a $3.42 million facility with $1.92 million available on an interim basis, a 15% PIK interest rate with a 5% default premium, and an exit fee equal to 6% of commitments payable only if the DIP lender is not approved as the stalking horse purchaser. The DIP matures on the earliest of February 28, 2026, a plan effective date, a 363 sale closing, dismissal or conversion, or 25 days after the petition date if a final order is not entered. Proceeds are restricted to a budget with a 15% variance and include working capital and professional fees; the motion also describes paying down remaining Avidbank debt and funding a professional fee reserve. The Interim DIP Order provides a professional fee carve-out (subject to post-trigger caps) and established a 75-day challenge period (or one business day before a sale hearing, if earlier) for parties to challenge prepetition liens.

Stalking horse and bid protections. F52, LLC is the stalking horse bidder at $6.5 million. The Bidding Procedures Order set a $7.0 million minimum bid and requires overbids to exceed the minimum by at least $100,000. Bid protections include a $200,000 break-up fee and up to $200,000 in expense reimbursement for the stalking horse, with other bidders barred from requesting similar fees.

Sale timeline. The court-approved schedule set a February 3, 2026 bid deadline, a February 5, 2026 auction (if needed), and a February 10, 2026 sale hearing.

Revised proposed sale order. The Revised Proposed Sale Order filed February 4, 2026 outlines a $6.5 million purchase price comprised of a credit bid of DIP obligations, $3.08 million in cash, and assumed liabilities. The proposal includes findings on fair value and good-faith purchaser status, states that cure notices were served and that adequate assurance and cure requirements will be satisfied for assumed contracts, and waives the Rule 6004/6006 stays to allow expedited closing.

Assets included. The Sale Motion defines the purchased assets to include intellectual property, inventory, cash and receivables, contracts and leases, permits, customer lists, books and records, and causes of action. Avoidance actions are excluded from the sale.

Stalking horse buyer profile. America's Test Kitchen described itself as a multi-platform cooking media company, with television shows, Cook's Illustrated magazine, and a 15,000-square-foot Boston test kitchen that supports product development and consumer research.

Case Status and Key Filings

Schedules and financials. Schedules filed January 26, 2026 show $10.89 million in assets and $25.66 million in liabilities, including $1.505 million in secured claims and $24.16 million in unsecured claims.

Bar date motion. The Bar Date Motion filed January 27, 2026 proposes a general claims bar date 30 days after service of the bar-date notice, a governmental claims bar date of June 29, 2026, a rejection damages bar date that is the later of the general bar date or 21 days after service of a rejection-claim notice, and an amended schedules bar date that is the later of the general bar date or 21 days after notice of amendment.

De minimis asset sales. A January 23, 2026 De Minimis Asset Sale Order authorizes asset sales or transfers up to $15,000 without further notice or hearing (subject to lienholder and committee notice) and sales up to $100,000 with five business days' notice and a five business day objection window.

First-day relief. The court has entered final orders authorizing payment of wages and benefits, customer programs, ordinary course obligations, critical vendors, cash management, and taxes and fees. A gift card procedures motion remains pending.

Assumption and assignment process. The debtor filed notices of potential assumption and assignment of executory contracts and leases, and counterparties including Google, Attentive, and Chubb filed limited objections or reservations of rights.

Unsecured creditors' committee. The Amended Committee Notice lists the following members and reflects resignations by Raj Overseas and Target Lighting/Thrive Value.

Sale objection and Dansk IP dispute. Form Portfolios filed an Objection to the Sale Motion, asserting Food52 only licensed Dansk-related IP under the Dansk License Agreement and a related license agreement, and that Food52 terminated those licenses on June 10, 2024. The objection points to a pending federal action alleging breach of contract and trademark infringement, argues post-termination covenants and injunctive rights survive, and seeks to prevent a sale "free and clear" of Form assets, including alleged reversion of the Kobenstyle mark.

Second omnibus rejection motion. The debtor filed a Second Omnibus Rejection Motion seeking to reject additional nonresidential leases and executory contracts and to abandon remaining personal property at certain leased premises, effective as of the rejection date.

Professional retention orders. The court entered orders approving retention of Young Conaway as debtor's counsel, Core Advisors as investment banker, Meru, LLC as financial advisor, and KCC as claims/ noticing agent.

Fee and reporting procedures. An interim compensation procedures motion proposes monthly fee statements with a 20-day objection period and quarterly interim fee applications.

Company Background and Ownership

Brand portfolio. Food52 operates three brands: Food52 (media and commerce), Schoolhouse (lighting and home goods), and Dansk (cookware and tabletop). The company reported 2024 revenue of approximately $74.8 million, including about $26.6 million at Food52, $44.7 million at Schoolhouse, and $3.4 million at Dansk. The First Day Declaration breaks out Food52's 2024 revenue as roughly $21.5 million from its marketplace and $5.1 million from advertising. The 2021 Schoolhouse acquisition and Dansk acquisition expanded the portfolio beyond Food52's core media and commerce brand.

Investment history. TCG Capital Management's 2019 majority investment positioned Food52 as a commerce-heavy business with over 16 million monthly users at the time and e-commerce representing 75% of revenue. The 2021 funding round led by TCG affiliates valued the company at roughly $300 million and funded the Schoolhouse acquisition. Court filings state that TCG affiliates own about 73% of Food52's fully diluted equity.

Historical product mix. At the time of the 2019 investment, Food52 highlighted a catalog of more than 5,000 kitchen and home goods, with nearly half of the assortment sold exclusively through its shop.

Operations and Footprint

Audience and marketplace scale. At the time of the Dansk acquisition, Food52 said it reached more than 25 million monthly users and that its shop represented hundreds of makers and manufacturers.

Schoolhouse manufacturing base. Schoolhouse operates from Portland and moved into a 125,000-square-foot factory in Northwest Portland in 2010, with many products designed and shipped from its Portland factory. NW Labor Press reported that production workers at the 2181 NW Nicolai St. facility voted to unionize in October 2022 and ratified a first contract in December 2023, and that layoffs after March 2025 reduced the production workforce from about 70 workers at the union vote to about 20. The brand's catalog spans lighting and home categories such as soft goods, wallpaper, and hardware.

Brooklyn headquarters. Food52 signed a 12-year, 42,000-square-foot lease at Dock 72 in the Brooklyn Navy Yard to consolidate its Manhattan office, with plans to build studios, communal spaces, and test kitchens in the new space. A Business Wire announcement about the Dock 72 lease described Food52 as reaching more than 25 million people monthly and noted Fast Company named it a "Most Innovative Company" in 2020.

Leadership and Pre-Filing Restructuring

Leadership transition. Erika Ayers Badan was named CEO in April 2024 after serving as interim chief executive, following the departure of Alex Bellos.

Pre-petition layoffs. Food52 cut headcount in multiple rounds before the filing, including a February 2024 round that reduced staff across Food52, Dansk, and Schoolhouse and a March 2025 round that reduced the workforce by about 40% and targeted the commerce organization.

December 2025 reductions. Business of Home reported that the largest cuts in December 2025 were concentrated at Schoolhouse and left fewer than 30 employees company-wide, while the Schoolhouse factory workforce includes IBEW Local 48 members.

Capital Structure and Creditor Position

Secured debt. The First Day Declaration lists Avidbank as the first-lien lender, with the cash sweep reducing funded debt to roughly $411,000, alongside a $1.505 million secured bridge note provided by the TCG lender on December 22, 2025.

Unsecured debt. The First Day Declaration and schedules reflect approximately $24.16 million in unsecured claims, including a $15 million term loan and trade, landlord, and tax obligations.

Equity ownership. The First Day Declaration states that TCG affiliates own about 73% of Food52's fully diluted equity.

Events Leading to the Filing

Cash sweep and liquidity break. The First Day Declaration describes Avidbank's December 15, 2025 cash sweep as the immediate trigger for the filing, eliminating operating liquidity and forcing rapid reductions in headcount. The debtor terminated roughly 60% of employees on December 17 and an additional 20% on December 26, leaving a skeleton crew to operate through the bankruptcy.

Prepetition marketing process. The company retained Core Advisors in September 2025 to run a sale process and added Buchbinder & Co. for additional outreach. The bankers contacted 211 prospective parties (135 by Core Advisors and 76 by Buchbinder), executed 35 NDAs, and received seven indications of interest by December 11, 2025. After the cash sweep, the debtor re-engaged interested parties for emergency funding; F52 submitted the only actionable proposal that included DIP financing and a stalking horse bid.

Bridge financing. The First Day Declaration states that TCG provided a $1.505 million bridge loan on December 22, 2025 to stabilize liquidity while the company evaluated sale options.

Frequently Asked Questions

Why did Food52 file for bankruptcy? The filing followed a December 15, 2025 cash sweep by Avidbank that left Food52 without operating funds and triggered layoffs. The First Day Declaration also cited a post-pandemic demand slowdown and the complexity of managing three distinct brands.

Who is buying Food52? America's Test Kitchen, through F52, LLC, is the stalking horse bidder at $6.5 million and the DIP lender. Competing bids are due February 3, 2026.

What are the key sale dates? The bid deadline was February 3, 2026 at 4:00 PM ET, the auction was scheduled for February 5, 2026 (if needed), and the sale hearing is set for February 10, 2026 at 2:00 PM ET.

What are the DIP financing terms? The DIP Financing Motion describes a $3.42 million facility with $1.92 million available on an interim basis. The facility bears 15% PIK interest with a 5% default premium and includes a 6% exit fee payable only if the DIP lender is not approved as stalking horse.

What do the schedules show about assets and liabilities? Schedules filed January 26, 2026 report $10.89 million in assets and $25.66 million in liabilities, including $1.505 million in secured claims and $24.16 million in unsecured claims.

Has the court set a claims bar date? The Bar Date Motion proposes a general bar date 30 days after service of the bar-date notice and a governmental bar date of June 29, 2026. Rejection-damages and amended-schedules bar dates would be the later of the general bar date or 21 days after service of notice.

Are all three brands included in the sale? The Sale Motion covers Food52, Schoolhouse, and Dansk assets and related IP, inventory, and contracts, with avoidance actions excluded.

What is the Form Portfolios objection about? The Objection to the Sale Motion asserts Food52 only licensed Dansk-related IP, that Food52 terminated those licenses on June 10, 2024, and that certain marks should have reverted. Form also points to a pending federal action for breach of contract and trademark claims and asks the court to prevent a sale "free and clear" of Form assets.

Who is the claims and noticing agent? Kurtzman Carson Consultants LLC dba Verita Global serves as the claims and noticing agent.

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