Extra dough might not be enough for struggling Philadelphia icon

Gov. Ed Rendell said Tuesday the state will extend an additional $1 million to Tasky Baking Company in an effort to keep the Philadelphia icon from facing bankruptcy.

The bakery, best known for its TaskyKake snack foods, disclosed serious financial problems last week and announced it was looking for a partner or may be forced to liquidate. The 96-year old firm received a $32 million low-interest taxpayer-subsidized loan last year and another $1 million in state grants to help build a new state-of-the-art bakery in Philadelphia last year.

“They said thanks but they haven’t called upon us because that’s a portion of what they need to keep from going into bankruptcy and they are going to have to piece it together,” said Mr. Rendell.

Asked if he would consider extending additional funds to the bakery if they requested it, Mr. Rendell said no.

“There is a limit to what you can do,” said Mr. Rendell.

The state had previously agreed to be flexible on repayment of the bakery’s existing loans to allow Tasty Baking to secure a partner or sell the company.

Charles Pizzi, president of the firm since 2002, said the firm’s year end financials were less than anticipated and the bankruptcy of major grocery chains such as the Great Atlantic and Pacific Tea Company (A&P) damaged the company’s market.

Mr. Pizzi is also chairman of the Philadelphia Federal Reserve Bank.

Over the past decade, Tasty Baking has tried, to expand and enhance its markets outside the Philadelphia region with mixed success.

“While this has been a challenging period for us operationally, we remain focused on growing the business,” Mr. Pizzi said in a statement last week. “To that end we continue to partner with new grocery and convenience store customers within our core markets, increase penetration with key customers, and launch new products in the marketplace.”

Any deal struck with Tasty Baking Company by the outgoing Rendell Administration could be repealed or changed by governor-elect Tom Corbett after he is sworn in on Jan. 18.

The Philadelphia Daily News reported Tasty Baking missed a loan payment last Wednesday and was negotiating with creditors to settle $81.5 million in debt.