On what should be one of the sweetest weeks in the chocolate business, Cero’s Candies may still be operating only because new minority partners sought for a temporary restraining order against the majority owner to keep the longtime store in business.
“This is a dispute between shareholders and the petition speaks for itself,” says Bill Ramsey, a partner in MSBB Holdings. “Unfortunately, court is our last resort.”
Betty Albrecht is the majority owner of the candy company that began in 1885, making it one of Wichita’s oldest businesses. She referred questions to her attorney, Mike Madden. Madden, who the suit says also is now CEO of Cero’s, did not comment.
On Feb. 6, MSBB Holdings partners – including Ramsey and his wife, Marilyn, and Wichita City Council member Bryan Frye and his wife, Sheila – filed a lawsuit in Sedgwick County District Court against Albrecht and Cero’s Candies By Albrecht.
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The lawsuit seeks an order confirming that MSBB owns 40 percent of the company’s stock and that those partners should be able to inspect Cero’s books. It also seeks monetary damages and a declaration that Albrecht breached fiduciary duties.
According to the suit, last fall the MSBB partners bought 40 percent of Cero’s for $25,000 from Blake Baysinger and Mike Capps. The suit says Baysinger and Capps became owners in the business last spring when Albrecht needed their consulting help but could not pay them.
The suit says Albrecht and MSBB began working together, but the relationship quickly soured as Albrecht began contesting the MSBB ownership and those partners saw the financial and physical condition of the business – including that Albrecht appeared to be living at the College Hill property on Douglas just east of Hillside.
Each group of partners hired attorneys. The suit says that following an October illness, Albrecht informed the other partners that her attorney, Madden, would take over Cero’s operations as its CEO.
“This development was confusing and distressing to the Ramseys and Fryes,” the suit says. “The fiduciary duty that is incumbent upon the officers and directors of a corporation includes an obligation to remain unencumbered by conflicts of interests that will preclude them from acting in the organization’s best interests.”
The suit contends Albrecht began selling or destroying Cero’s assets on Jan. 29, including deleting the store’s Facebook page and starting a new one without historic content.
According to a Feb. 9 emergency application for a restraining order, after the MSBB partners filed suit, Albrecht told a former Cero’s employee that she planned to close the store and open a food truck instead so “they can’t get in here then.”
“The value of Cero’s as a brand derives, in large part, from its longevity,” the application says.
If the business closes, the application says, the brand “will be irreparably tarnished.”
The temporary restraining order was granted to keep the business in operation until a 9 a.m. hearing on Feb. 23. Look for more information then.