Zitner Candy Corp., the nearly 100-year-old North Philadelphia producer of chocolate-covered Easter eggs, filed for bankruptcy protection in a bid to restructure what the company's lawyer called "a real big overhang of secured debt."
"The company, operationally, is very stable," Albert A. Ciardi III, Zitner's lawyer in the April 13 bankruptcy filing in U.S. Bankruptcy Court for the Eastern District of Pennsylvania, said Monday.
Zitner's biggest chunk of debt is $4.6 million in secured debt owed to Bryn Mawr Trust. In a junior position is $1.7 million to $1.8 million owed to Lava Funding LLC, according to a court filing. "The cash flow of the company just doesn't support the large secured debt that was put on it," Ciardi said.
The largest unsecured creditor is Kenneth R. Schuster, who joined Evan Prochniak and Sam Sherman to buy the company in 2010. Schuster's unsecured claim is $486,000.
Prochniak, described at the time of the purchase as a real estate lawyer in Media, and his wife, Jaime, filed for personal bankruptcy on the same day as the Zitner filing.
Schuster and Prochniak, who were among the partners in a company that applied for a medical marijuana dispensary permit for Zitner's location at 17th and West Clearfield Streets, did not respond to requests for comment. That company, Philagrow, did not get a license.