Baltimore organic salad dressing maker Tessemae’s files for Chapter 11 bankruptcy – Baltimore Sun

Tessemae’s, a Baltimore-based organic salad dressing maker, filed for Chapter 11 bankruptcy to restructure debt and stop what it called costly and distracting litigation from a former creditor.

The seller of dressings and condiments sold to dozens of national and regional retailers filed for voluntary bankruptcy reorganization Wednesday in U.S. Bankruptcy Court in Baltimore. The filing lists debts ranging from $10 million to $50 million.

The Chapter 11 filing will allow the manufacturer to keep its assets, raise new capital to meet customer demand and stop litigation, the company said. The company found the former creditor’s claim unfounded and filed a counterclaim, but said the ongoing litigation and costs had hampered growth in recent years.

In September, Tessemae laid off 35 workers at two former facilities in Rosedale and Essex, according to a report filed with the Maryland Department of Labor. The company did not confirm reports on Wednesday that it had only six employees left.

“Our goal from the beginning has been to bring a suite of products to market for those who believe there is a better way,” said Gregory Vetter, CEO of Tessemae. “This decisive action will undoubtedly enable us to do just that and in turn become a stronger and more competitive business.”

The company said it believes the restructuring will benefit creditors, interest holders and consumers and expects to continue operating without interruption.

Tessemae Organic Salad Dressings and Seasonings are sold online and at retailers such as Costco, Giant, Harris Teeter, Mom’s Organic Market, Safeway, Sam’s Club, Shop Rite, Sprouts, Target, Walmart, Wegmans and Whole Foods Market.

Vetter and his two brothers started the company in Annapolis in 2009 based on their mother’s natural salad dressing recipe. The products debuted in a single Whole Foods store, and sales quickly expanded to national grocers, retailers and hotel chains.

The brand got a boost in 2015 when Under Armor founder Kevin Plank and his brother Scott Plank invested $5 million in the company, which at the time had sales of $25 million. By 2018, Tessemae products could be found on the shelves of approximately 6,000 US stores.

The company has faced its share of litigation over the years.

In 2018, several suppliers filed lawsuits against the company, including an Elkridge-based contract manufacturer who sought more than $150,000 in damages.

Maryland Packaging Ltd. Inc., which co-packages and jointly manufactures products for food manufacturers, claimed in the lawsuit that Tessemae’s failed to pay for more than $60,000 worth of services and owes nearly $90,000 in late fees.

At the time, Vetter said the dressing maker was forced out of business with the contractor because it did not follow its procedures. Four other suppliers, including olive oil distributors, also filed lawsuits.

And in 2020, the company claimed in federal court that former consultants and former leaders tried to “steal” the company from the three brothers who founded it.

That lawsuit in Maryland District Court accused a Washington-based law firm and five Maryland men of trying to “disrupt” the three brothers and causing the company to incur an estimated $45 million in losses.

The 12-count complaint alleged that various defendants, including some who held executive or board positions, engaged in fraud, negligence, legal malpractice, fraud, conspiracy, tortious interference with a business relationship, breach of contract, breach of fiduciary duty. and unjust enrichment.