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

Food52, Inc., the Brooklyn-based food media and commerce company known for recipe sharing and home goods, filed for chapter 11 bankruptcy protection on December 29, 2025, in the U.S. Bankruptcy Court for the District of Delaware. The filing came two weeks after secured lender Avidbank swept substantially all of the company's cash from its bank accounts on December 15, 2025, leaving Food52 without operating funds and forcing layoffs of 75% of staff. America's Test Kitchen has emerged as the stalking horse bidder with a $6.5 million offer, while also providing $3.42 million in debtor-in-possession financing to fund a 35-day sale process. The stalking horse bid represents a decline of approximately 98% from the company's peak valuation of approximately $300 million in December 2021, following The Chernin Group's investment of more than $160 million.

Company Background and Business Model

Food52 was founded in 2009 by Amanda Hesser, a former New York Times food editor, and Merrill Stubbs, a food writer. The company name "52" represents the weeks in a year, a reference to the founders' original concept for a cookbook featuring one recipe per week. Hesser and Stubbs launched the company using a book advance and family loans, beginning with a recipe-sharing community that allowed home cooks to submit and vote on recipes. The founders spent eight months raising their first seed round of $750,000, closing in October 2010. The e-commerce shop launched in 2013, transforming the company from a recipe-sharing community into a content-to-commerce business that integrated editorial content with product sales.

Food52 brand. The flagship Food52 brand operates as a media and commerce platform uniting food, home, and lifestyle content. The company reports reaching approximately 37 million monthly consumers through its digital properties. The e-commerce operation utilizes a dropship marketplace model with more than 100 artisanal makers, with a product catalog that included more than 5,000 kitchen and home goods at its peak. Nearly 50% of products were exclusive to Food52, with the Five Two line identified as the most profitable brand within the Food52 shop. E-commerce accounted for 75% of the company's total revenue prior to The Chernin Group's investment, with e-commerce revenues averaging 50% year-over-year growth and paid marketing accounting for only 5% of commerce revenue. The company was recognized four times on the Inc. 5000 list of fastest-growing private companies. In 2024, the Food52 brand generated approximately $26.6 million in revenue, comprising approximately $21.5 million from marketplace operations and approximately $5.1 million from advertising.

Schoolhouse. Food52 acquired Schoolhouse in December 2021 for approximately $48 million in cash and stock. Schoolhouse is a Portland, Oregon-based lighting and lifestyle goods company founded in 2003, dedicated to the preservation of American manufacturing. The company sells lighting, furniture, hardware, and decor through its own direct-to-consumer platform. Schoolhouse operates with a unionized manufacturing workforce. In 2024, Schoolhouse generated approximately $44.7 million in revenue, making it the largest revenue contributor among Food52's three brands.

Dansk Designs. Food52 acquired Dansk from Lenox Corporation in May 2021. Dansk was founded in 1954 by Ted and Martha Nierenberg and is credited with reinventing American tabletop design by bringing Scandinavian aesthetics to U.S. consumers. The brand became popular in the 1960s and 1970s. Under Food52 ownership, Dansk products were sold primarily through the Food52 and Schoolhouse platforms. In 2024, Dansk generated approximately $3.4 million in revenue, the smallest contribution among the three brands. Combined, the three brands generated approximately $74.8 million in revenue in 2024.

Investment History and Valuation Decline

The Chernin Group investment. TCG Capital Management acquired a majority stake in Food52 for $83 million in September 2019. TCG Capital Management is an affiliate of The Chernin Group, LLC, a media and entertainment investment firm founded by Peter Chernin, Jesse Jacobs, and Mike Kerns. Peter Chernin previously served as President and Chief Operating Officer of News Corporation. At the time of the investment, Food52's valuation exceeded $100 million, with monthly reach exceeding 16 million people. The investment was intended to fund a flagship brick-and-mortar retail location, expand the Five Two product line, and grow the content, video, product, and engineering teams. Co-founder Amanda Hesser stated at the time that the investment would unlock "tremendous growth opportunities" and allow the company to "reach new markets" and "create new retail channels."

2021 expansion. In December 2021, TCG invested approximately $80 million more in Food52, with $48 million of that investment used to fund the Schoolhouse acquisition. The deal tripled Food52's valuation since the 2019 investment, reaching approximately $300 million. Total TCG investment in Food52 exceeded $160 million across the 2019 and 2021 transactions. Following the investments and acquisitions, TCG affiliates (TCG 2.0 Food52, LLC and TCG 3.0 Food52, LLC) owned approximately 73% of company stock on a fully diluted basis.

Revenue decline. The company's trajectory reversed following the COVID-19 pandemic. Peak revenue reached approximately $160 million in 2021, driven by pandemic-era consumer behavior favoring home cooking and home goods. By 2024, combined revenue had declined to approximately $74.8 million. Industry analysis projected 2025 revenue at approximately $60 million, comprising $50 million in commerce and $10 million in media, with an EBITDA loss of approximately $2 million. The analysis attributed the decline to the company having "lost sight of what made Food52 successful" by "doubling down on the commerce side of things while deprioritizing the content side." Pandemic-era assumptions about permanent changes in consumer behavior proved incorrect as consumers shifted away from at-home cooking.

Valuation trajectory. The decline from a $300 million valuation in December 2021 to a stalking horse bid of $6.5 million in December 2025 represents a reduction of approximately 98% in four years. Industry commentary noted that the $300 million valuation became an "anchor on the business" that limited strategic flexibility for future transactions.

Leadership Changes and Strategic Shifts

CEO transition. In April 2024, Food52 appointed Erika Ayers Badan as CEO. Badan previously served as CEO of Barstool Sports from 2016 to 2024, during which time she grew the company's commerce division from $2 million to over $100 million in revenue. During her nine years at Barstool, the company became one of the top ten podcasting publishers in the United States, and she launched over 35 brands including Pat McAfee and Call Her Daddy. Barstool was sold for $550 million in 2023. Badan had been serving as a board member and advisor to Food52 since 2019 prior to assuming the CEO role, having joined the board in the same year as The Chernin Group's initial investment. Her previous experience also included serving as CMO at AOL. In taking the Food52 role, Badan stated she was attracted to "the idea of an organic content experience that can be monetized in multiple ways." She also noted that Food52's affluent female demographic represented a different customer base than Barstool's young male audience, presenting new challenges.

Strategic repositioning. Under new leadership, Food52 reduced its product catalog and shifted its content strategy. The CEO approved a 50% product reduction in April 2024 and described the company as "trimming it down to a handful of curated items." The company hired Josh Young, a former TikTok production head, and introduced an intern program for content production. The new content approach emphasized behind-the-scenes storytelling and video showcasing staff and vendor personalities.

Workforce Reductions Leading to Bankruptcy

Food52 implemented multiple rounds of workforce reductions in the 18 months preceding the bankruptcy filing, reflecting the company's deteriorating financial position.

February 2024 layoffs. The company laid off 45 employees across Food52, Dansk, and Schoolhouse in February 2024, representing approximately 22% of total headcount at the time.

March 2025 layoffs. Food52 cut its workforce by approximately 40% in March 2025, reducing headcount from 140 to approximately 90 employees. The layoffs primarily targeted the marketplace and commerce division, reflecting the strategic pivot away from mass marketplace operations. The company was also negotiating with Alicia Kornreich for a chief commercial officer role during this period.

December 2025 layoffs. Following the Avidbank cash sweep on December 15, 2025, Food52 terminated approximately 60% of its remaining workforce on December 17, 2025. The layoffs occurred on a Wednesday afternoon following a mandatory all-hands meeting. Staff were informed via email within 15 minutes of the meeting whether they retained employment. The CEO stated she had "no good news to share." The majority of the cuts were concentrated at Schoolhouse, which had the largest headcount among the three brands. On December 26, 2025, three days before the bankruptcy filing, an additional 20% of employees were terminated. Fewer than 30 employees remained at the company following these reductions. The remaining staff included Food52's content and advertising teams, along with unionized manufacturing workers at Schoolhouse who were protected by contractual requirements for advance notice. The vast majority of terminated employees were let go without severance. Schoolhouse continued to ship orders placed before the layoffs through its remaining skeleton crew.

The Avidbank Cash Sweep

The immediate trigger for Food52's bankruptcy filing was a cash sweep by secured lender Avidbank that left the company without operating funds.

Pre-sweep marketing process. In summer 2025, the Food52 board began considering strategic alternatives for the company. In September 2025, the company engaged Core Advisors LLC as lead investment banker and Buchbinder & Co. LLC for special situations advisory services to explore a potential sale or capital raise. The investment bankers contacted 211 prospective parties, comprising 135 contacts by Core Advisors and 76 by Buchbinder. Thirty-five parties executed non-disclosure agreements to access confidential business information, and seven submitted indications of interest by the December 10, 2025 deadline. On December 12, 2025, Avidbank acknowledged progress being made on the sale process. The company was actively engaged in discussions with multiple interested parties at the time of the cash sweep.

Cash sweep event. On December 15, 2025, three days after acknowledging the marketing progress, Avidbank swept substantially all cash from Food52's bank accounts without warning. The sweep included funds held in trust for federal government obligations. The bank account balance reached zero on the Monday prior to the Wednesday layoff announcement. The cash sweep reduced Avidbank's secured position from approximately $6.3 million to approximately $411,000 while eliminating the company's ability to fund operations or meet payroll. In court filings, the CEO stated that "The Company found itself scrambling for survival."

Post-sweep deterioration. Following the cash sweep, only one of the seven parties that had submitted indications of interest—America's Test Kitchen—provided an actionable proposal. The other five interested parties did not proceed after the cash sweep eliminated the company's operating liquidity. On December 22, 2025, TCG provided a $1.505 million bridge loan to preserve the company's ability to continue operations and pursue a sale process. The company filed for chapter 11 protection one week later on December 29, 2025.

Pre-Petition Capital Structure

Food52 entered bankruptcy with a relatively modest debt load compared to its historical valuation, though the cash sweep fundamentally altered the capital structure.

Secured debt. As of the petition date, secured debt totaled approximately $1.916 million. This comprised approximately $411,000 owed to Avidbank as first priority secured debt (reduced from approximately $6.3 million via the cash sweep) and $1.505 million owed to TCG Lender as second priority secured debt pursuant to the December 22, 2025 bridge loan.

Unsecured debt. Unsecured obligations totaled approximately $23.3 million. The largest unsecured obligation was a $15 million term loan from Silicon Valley Bank, which was guaranteed by TCG. Trade payables, vendor obligations, landlord claims, and tax liabilities accounted for approximately $8.3 million as of the petition date.

Listed liabilities. Court filings indicated the company listed liabilities of at least $10 million and assets of at least $1 million, though the detailed capital structure in the First Day Declaration indicates substantially higher total liabilities.

DIP Financing

America's Test Kitchen, through its affiliate F52, LLC, is providing debtor-in-possession financing to fund operations during the chapter 11 case.

Facility terms. The DIP facility provides total commitments of $3.42 million with interim availability of $1.92 million under the interim order. The facility bears interest at 15% per annum on a payment-in-kind basis, increasing to 20% upon an event of default. The DIP facility matures on February 28, 2026 and includes a 6% exit fee that is waived if America's Test Kitchen consummates the sale. The professional fee carve-out is limited to $125,000 following a trigger event. The facility is structured to fund operations through the 35-day sale process timeline, with amounts tied to a court-approved budget permitting 15% variance.

Use of proceeds. DIP proceeds will fund working capital and general corporate purposes during the 35-day sale process, with 15% variance permitted from the approved budget. Proceeds will also pay off the remaining Avidbank secured debt of approximately $411,000, fund professional fees and expenses, and establish a professional fee reserve.

DIP milestones. The DIP facility includes milestone dates requiring entry of the interim DIP order within two business days of the petition date (met on December 31, 2025), entry of the stalking horse approval order by January 9, 2026, entry of the final DIP order within 25 days of the petition date, and entry of the sale approval order by February 2, 2026. The court entered the interim DIP order on December 31, 2025.

Section 363 Sale Process

Food52 is pursuing a Section 363 sale of substantially all assets with America's Test Kitchen serving as the stalking horse bidder through its affiliate F52, LLC.

Stalking horse bid. America's Test Kitchen has submitted a stalking horse bid of $6.5 million for substantially all of Food52's assets. The bid includes a 10% deposit and is subject to higher and better offers. The stalking horse receives bid protections comprising a break-up fee of $200,000 minus expense reimbursement and expense reimbursement of up to $200,000. Minimum overbids must exceed $650,000, establishing a minimum qualified bid threshold of $7,150,000.

Sale timeline. The bid deadline is January 26, 2026 at 4:00 PM ET. If competing qualified bids are received, an auction will be conducted on January 29, 2026 at 10:00 AM ET. The sale hearing is scheduled for February 2, 2026 with a target closing date of February 6, 2026. The entire sale process is designed to conclude within 35 days of the petition date.

Assets included. The sale includes substantially all of Food52's assets, encompassing intellectual property for the Food52, Schoolhouse, and Dansk brands; inventory; cash and cash equivalents; accounts receivable; executory contracts and unexpired leases to be assumed and assigned; permits and licenses; customer lists; books and records; and claims and causes of action. Avoidance actions are excluded from the sale. The sale will be conducted free and clear of all liens, claims, and encumbrances, with the DIP lender having the right to credit bid.

Scope of ATK acquisition. While all three brands are included in the potential sale assets, it remains unclear whether America's Test Kitchen intends to acquire all three brands or only the Food52 brand. The stalking horse agreement provides ATK with flexibility regarding which assets to acquire, and industry observers have noted that the Schoolhouse and Dansk brands may have different strategic value to a food media company.

About America's Test Kitchen

America's Test Kitchen, the stalking horse bidder and DIP lender, is a Boston-based cooking media company that operates across television, print, and digital platforms.

Company background. America's Test Kitchen was founded in 1992 and is led by CEO Daniel Suratt. The company operates a 15,000-square-foot test kitchen in Boston's Seaport District and employs 50 full-time test cooks, editors, and product testers. The test kitchen serves as the foundation for the company's recipe development and product testing operations.

Media properties. America's Test Kitchen produces several television shows including America's Test Kitchen, Cook's Country, and America's Test Kitchen: The Next Generation. The company publishes Cook's Illustrated magazine and operates the Proof podcast, FAST channels, and the ATK Essential subscription service. The company's content strategy emphasizes testing methodology and editorial standards.

Strategic rationale. ATK CEO Daniel Suratt stated in the company's press release: "We are delighted at the opportunity to acquire the Food52 brand assets and to grow this iconic brand that audiences love." Food52 CEO Erika Badan stated: "We are excited at the prospect of bringing this into the future with the help of America's Test Kitchen." Food52 reports reaching approximately 37 million monthly consumers through its digital properties.

First Day Relief

Food52 filed customary first-day motions seeking authority to continue operations during the bankruptcy case. The court held the first day hearing on December 31, 2025 and entered interim orders on several motions.

Motions filed. First-day motions included applications and motions for: appointment of Kurtzman Carson Consultants LLC dba Verita Global as claims and noticing agent; authority to prohibit utilities from discontinuing services; authority to pay prepetition taxes; authority to pay prepetition trade obligations in the ordinary course; authority to honor gift cards and customer obligations; authority to pay critical vendors; authority to continue cash management systems and bank accounts; authority to continue insurance programs; approval of the $3.42 million DIP financing facility; authority to reject certain executory contracts and unexpired leases; and approval of bidding procedures for the Section 363 sale.

Interim orders. The court entered interim orders on December 31, 2025 approving the claims agent application, authorizing payment of prepetition taxes, prohibiting utility discontinuance, authorizing ordinary course payments, authorizing cash management continuation, authorizing employee wage payments, authorizing critical vendor payments, approving interim DIP financing, and authorizing insurance program continuation.

Gift card motion. Food52 filed a motion for gift card procedures on December 31, 2025 seeking authority to honor prepetition gift cards and store credits. The company maintains customer loyalty programs and gift card balances that represent prepetition obligations to consumers.

Key Dates and Timeline

Professional Retentions

Industry Context: Food Media and E-Commerce

Food52's trajectory reflects broader challenges facing content-to-commerce businesses in the post-pandemic environment. The company's growth during the COVID-19 pandemic, when consumers spent more time cooking at home and investing in home goods, created revenue and valuation expectations that proved difficult to sustain as consumer behavior normalized.

Content-to-commerce model. Food52's business model combined editorial content—recipes, cooking tips, and lifestyle articles—with an e-commerce marketplace selling kitchen and home goods. The model assumes that engaged content consumers will convert to purchasers of related products. During the pandemic, this model performed well as consumers sought both cooking inspiration and kitchen equipment. Post-pandemic, the conversion dynamic weakened as consumers returned to pre-pandemic behaviors and faced inflationary pressures on discretionary spending.

Brand portfolio challenges. The acquisition of Schoolhouse and Dansk expanded Food52's revenue base but also increased operational complexity. Food52 operated three distinct brands with different product categories, customer bases, and operational requirements. Schoolhouse's manufacturing operations and unionized workforce added fixed costs to the company's expense structure.

Competitive landscape. Food52's marketplace faced competition from mass retailers offering similar products at lower price points. The company reduced its product catalog by 50% in April 2024, with the CEO describing the shift as "trimming it down to a handful of curated items."

Valuation history. The $300 million valuation achieved in December 2021 contrasted with the company's subsequent financial performance. Industry analysis noted that this high valuation became an "anchor on the business" that limited flexibility. By 2024, combined revenue had declined to approximately $74.8 million from peak revenue of approximately $160 million in 2021.

Frequently Asked Questions

Why did Food52 file for bankruptcy?

The immediate trigger was Avidbank's cash sweep on December 15, 2025, which left the company with zero operating cash and forced immediate layoffs. Underlying factors included post-COVID consumer spending decline, revenue falling from approximately $160 million in 2021 to approximately $75 million in 2024, and challenges managing three distinct brands after the Schoolhouse and Dansk acquisitions.

Who is buying Food52?

America's Test Kitchen, through its affiliate F52, LLC, is the stalking horse bidder with a $6.5 million offer. ATK is also providing the DIP financing. Other bidders can submit competing offers until January 26, 2026, with a minimum qualified bid of $7,150,000.

What happened to Food52's valuation?

Food52 was valued at approximately $300 million in December 2021 after The Chernin Group invested more than $160 million total. The stalking horse bid of $6.5 million represents a decline of approximately 98% from peak valuation.

Are Food52, Schoolhouse, and Dansk all included in the sale?

All three brands are part of the Food52, Inc. bankruptcy estate and included in the potential sale assets. It remains unclear whether America's Test Kitchen intends to acquire all three brands or only the Food52 brand.

What happened with the Avidbank cash sweep?

On December 15, 2025, Avidbank swept substantially all cash from Food52's bank accounts without warning, despite acknowledging progress on a potential transaction just days earlier on December 12. The sweep included funds held in trust for federal government obligations and reduced Avidbank's secured position from approximately $6.3 million to approximately $411,000 while eliminating the company's operating liquidity.

How many employees remain at Food52?

Fewer than 30 employees remain after layoffs of 75% on December 17, 2025 and additional cuts on December 26, 2025. The remaining staff includes Food52's content and advertising teams, plus unionized manufacturing workers at Schoolhouse who were protected by contract notice requirements.

When will the auction take place?

The auction is scheduled for January 29, 2026 at 10:00 AM ET, if competing bids are received. The bid deadline is January 26, 2026 at 4:00 PM ET. The sale hearing is scheduled for February 2, 2026.

How much did The Chernin Group invest in Food52?

The Chernin Group invested more than $160 million total across its 2019 majority stake acquisition ($83 million) and 2021 additional investment (approximately $80 million, including the Schoolhouse acquisition). TCG affiliates own approximately 73% of company stock on a fully diluted basis.

Who is the claims agent for Food52?

Kurtzman Carson Consultants LLC, doing business as Verita Global, serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

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