Triple Sticks Foods - Chapter 11 Case Summary

Business Description

Triple Sticks Foods, LLC ("Triple Sticks" or the "Debtor") operates a food manufacturing facility of approximately 36,000 square feet located at 9200 W. Main Street, Belleville, Illinois. The Debtor is a contract manufacturer and co-packer of frozen food products, including sandwiches, snack items, and prepared foods, serving a range of retail and food service customers.

• Triple Sticks produces primarily on a private-label basis for customers who sell under their own brand names, while also manufacturing certain products under its own brand.
• The Debtor provides end-to-end manufacturing capabilities, including sourcing, production, packaging, and distribution of frozen food products.

Triple Sticks recorded revenue of approximately $13.9 million in FY 2021 on unit sales volume of approximately 20.9 million units, with revenue holding relatively stable at approximately $13.9 million in FY 2022 as unit volume peaked at approximately 22.3 million. Revenue subsequently declined sharply to approximately $8.0 million in FY 2023 despite unit volume holding steady at approximately 22.3 million, reflecting a significant contraction in per-unit pricing. Revenue fell further to approximately $5.2 million in FY 2024 as unit volume also contracted to approximately 13.5 million. In FY 2025, revenue recovered to approximately $8.8 million despite a further unit volume decline to approximately 8.8 million units, as per-unit pricing rose sharply (from approximately $0.38 to approximately $1.00 per unit) following a series of product price increases implemented in response to material cost inflation, even as customer losses continued to weigh on volume.

As of the Petition Date, the Debtor employed 39 employees in Belleville, Illinois, none of whom are union members. The Debtor also relies on services rendered by contractors furnished by a third-party staffing firm.

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Corporate History

Triple Sticks was formed in 2017 to supply convenience store retailers and others with sandwich products. In its first year of operation, the Debtor produced and sold approximately 1 million sandwich units. Over time, Triple Sticks expanded its customer base and product offerings to include meal kits and other ready-to-eat foods, reaching peak production of approximately 22 million units, almost all of which were sandwich products.

• Growth in top line sales from inception through 2021 was substantial, though it was coupled with operational challenges, including workforce retention difficulties, inflationary pressures, and reliance on non-traditional financing sources.

Corporate Structure and Ownership

Triple Sticks manufactures and sells its products and related services through a single corporate entity with no parent or subsidiary companies. The Debtor's founder, Joseph Trover, serves as Manager and sole voting member, directly owning the majority of the economic interests in the Debtor.

• Certain of the Debtor's insurance policies, utilities, and tax obligations are billed to a predecessor entity known as Troverco, LLC ("Troverco"), which is no longer in operation. Because Troverco was similarly owned and operated by Mr. Trover, such billings continued to be directed to Troverco for ease of administration, and Triple Sticks has paid and continues to pay for the services and obligations that it exclusively uses.

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Operations Overview

Triple Sticks operates from a roughly 36,000-square-foot manufacturing facility at 9200 W. Main Street, Belleville, Illinois, which houses substantial space for refrigerated and frozen food operations. The facility is occupied pursuant to a lease with The Jeanette L. Trover Revocable Living Trust and The Joseph Trover GST Family Trust (collectively, the "Landlord"), a pair of trusts bearing the names of Mr. Trover's mother and late father, over which members of the Trover family serve as trustee. Mr. Trover is not a trustee of either trust. The Debtor intends to assume the lease but cannot do so without curing certain existing defaults thereunder and keeping current on post-petition obligations; failure to cure may result in the loss of the Debtor's use of its primary facility.

Workforce and Compensation

As of the Petition Date, Triple Sticks employed 39 employees, none of whom are union members, supplemented by contractors furnished by a third-party staffing firm. The Debtor has faced persistent workforce challenges in the post-COVID environment, with increased employee absenteeism and difficulty maintaining consistent staffing levels.

• Employees are paid bi-weekly, with payroll administered by ADP. The Debtor's average bi-weekly payroll is approximately $105,000, with the next disbursement scheduled for April 23, 2026.
• As of the Petition Date, accrued and unpaid prepetition employee wages totaled approximately $131,000 and accrued unpaid contractor expenses totaled approximately $18,000. The Debtor does not believe that any individual employee's prepetition wage claim would exceed $17,150.

Employee Benefits

• The Debtor provides group health insurance through a fully funded plan operated by United HealthCare ("UHC"), funded in part through employee contributions. Historically, the Debtor paid UHC approximately $25,000 per month, of which approximately $18,000 was employer-funded. Due to recent headcount reductions, the most recent monthly payment dropped to approximately $18,000 in total.
• Additional benefits include employer-funded life insurance, optional employee-paid long-term and short-term disability insurance, paid time off, six paid holidays, paid bereavement leave, and jury duty pay of up to five business days.
• A 401(k) retirement savings plan is maintained through Fidelity, though the Debtor does not match employee contributions. No employee has contributed to the plan for at least one year.

Banking Arrangements

• The Debtor maintains its primary operating account with Carrollton Bank, which is linked to ADP for payroll funding and receives ACH payments from major customers. The account balance fluctuates significantly throughout the month—ranging, for example, from $4,251.32 to $372,277.73 in February 2026.
• A largely dormant depository account is maintained at Commerce Bank.
• The Debtor does not have a corporate credit card. Rather, the Debtor's president, Joseph Trover, maintains a personal credit card used exclusively for business expenses, with various employees designated as authorized users.

Utilities and Insurance

• The Debtor incurs utility costs for electricity, gas, water, sewer service, telecommunications, and internet services at an average monthly rate of approximately $25,679.
• The Debtor maintains various insurance programs, including property, general liability, automobile, inland marine, excess liability, employee benefits liability, workers' compensation, and directors and officers/employment practices liability coverage. Annual premiums total approximately $369,000 (net of employee contributions), paid on a monthly, quarterly, or annual basis. None of the policies are financed, and the Debtor was current on all premium obligations as of the Petition Date. The workers' compensation premium is not fixed; it is calculated monthly based on actual payroll (with a projected annual premium of approximately $51,902), and one claim is currently pending under that plan.

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Prepetition Obligations

Triple Sticks' financial structure is straightforward. The Debtor does not have traditional bank financing for its operations. Rather, its business is financed primarily by purchase money equipment loans, special arrangements with vendors and customers, non-bank loans from friends and family, and merchant cash advance ("MCA") facilities. The Debtor has little in the way of secured debt, with equipment leases, MCA obligations, trade debt, and rent comprising the bulk of its remaining liabilities, much of which is unsecured.

SBA Secured Debt

• The Debtor owes the U.S. Small Business Administration ("SBA") approximately $385,880, secured by a lien against the Debtor's prepetition receivables, inventory, and equipment.
  • As of the Petition Date, the Debtor's prepetition accounts receivable totaled approximately $585,000, with additional equipment and inventory supporting the secured obligations. The SBA is oversecured.

Equipment Financing

• Triple Sticks is party to a number of equipment leases and purchase agreements pursuant to which discrete equipment assets are pledged as collateral. Lenders include Alliance Funding Group, Ascentium Capital/Regions Bank, Meridian Equipment Finance, LEAF Funding (Integrity), and Channel Equipment Finance/Capital LLC, among others.
  • A significant portion of the equipment financing relates to pizza line equipment acquired in connection with a failed customer initiative in 2025.

Merchant Cash Advance Facilities

• Triple Sticks is party to MCA agreements with Funding Metrics, LLC (dba Lendini), Libertas Funding, and Avion Funding, with original principal amounts of $100,000, $381,000, and $280,000, respectively. The aggregate amount outstanding under all MCA facilities as of the Petition Date is approximately $129,500 (the declaration alternately describes this balance as approximately $120,000 in its narrative discussion of the MCA burden).
  • The Debtor continues to investigate whether the MCAs constitute true loans and, if so, whether their provisions give rise to claims sounding in fraudulent transfer, usury, unfair trade practices, or other matters. Each MCA, though styled as a receivable or receipts purchase, appears to impose an absolute repayment obligation on the Debtor and shifts virtually all risk to the borrower.
  • While potentially contested, any repayment obligations that may exist may be argued by the MCA lenders to be secured by a lien against the Debtor's receivables. If such liens are valid, the MCA lenders are oversecured.

Trade and Other Obligations

• Beyond the foregoing, Triple Sticks' financial obligations are generally in the nature of ordinary trade and vendor debt, employee compensation and benefits expenses, taxes, and insurance.
• As a condition of its facility lease, the Debtor is obligated to pay real property taxes to Saint Clair County, Illinois, of approximately $20,000 annually, payable in equal installments historically due in July and September of each year for the prior year's obligation. The Debtor has accrued an estimated $20,000 in taxes for the year 2025.
• Triple Sticks continues to reserve all rights, claims, arguments, and offsets that may serve to reduce creditor claims.
• The Debtor's estimated liquidation analysis as of April 13, 2026 indicates that approximately $638,629 would be available for distribution to creditors according to priority in a liquidation scenario, underscoring the value-maximizing rationale for pursuing a going concern sale.

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Events Leading to Bankruptcy

Failed Pizza Line Initiative and Customer Loss

In 2025, Triple Sticks endeavored to supplement its product offerings by building a pizza production line based on a newly presented opportunity with a substantial new customer—a retail grocer with over 2,000 locations. To secure the opportunity, the Debtor acquired and financed roughly $750,000 in new equipment. However, as product development continued, the customer sought to introduce new product parameters and requirements not included in Triple Sticks' original cost and performance assumptions.

• As a result, products could not be produced at the price point Triple Sticks had established. In February 2026, the customer withdrew from the transaction, resulting in an immediate impairment of the Debtor's go-forward projections. The substantial cash expenditures and new debt obligations incurred in pursuing the pizza line failed to yield the anticipated revenue, profits, or new distribution channels.
• These setbacks followed, and were exacerbated by, a separate customer's breach of an ongoing manufacturing agreement in Summer 2025, in which the customer abruptly cancelled its business with Triple Sticks without providing the requisite six-month notice period. The Debtor may have valuable legal claims against such customer, which remain subject to legal review.

Inflationary Pressures and Supply Chain Challenges

Inflation has had a material impact on Triple Sticks' earnings, with material costs increasing by roughly 6% in each of FY 2023 and FY 2024 relative to the prior year. In response, the Debtor commenced a series of product price increases, with additional increases planned.

• Triple Sticks has also experienced cash shortfalls that have impaired procurement of raw materials necessary for manufacturing, while product deliveries have been hampered by rising shipment costs and increasing payables owed to logistics vendors. As of the Petition Date, the Debtor is on C.O.D. terms with a number of its product and service vendors.

MCA Burden and Liquidity Crisis

The debt incurred in connection with the pizza line launch pressed Triple Sticks to take on costly MCA facilities to address cash shortfalls. Repayment of these facilities costs roughly $18,000 to $19,000 per week, threatening ongoing operations. The total outstanding on all MCA facilities as of the Petition Date is approximately $120,000.

• In the days preceding the filing, certain MCA creditors sought to redirect payments from the Debtor's customers directly to themselves and, in the Debtor's view, overstated the amounts outstanding. The Debtor asserted that allowing MCA creditors to divert its cash would result in an immediate and abrupt shuttering of operations.

Chapter 11 Filing and Go-Forward Strategy

Facing dire cash shortages and the risk of operational collapse, Triple Sticks filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code on April 16, 2026, in the U.S. Bankruptcy Court for the Southern District of Illinois. The Debtor intends to continue in possession of its business and property.

• Prior to filing, the Debtor retained Spencer Fane, LLP as prepetition bankruptcy counsel in February 2026, engaged Dawi Consulting and its principal, Daniel Wiggins, as financial advisor in March 2026, and engaged Ravinia Capital to initiate a sale and marketing process and to identify DIP financing options. The Debtor additionally proposes to retain Desai Law Firm, LLC, led by Spencer Desai, as bankruptcy conflicts counsel to handle matters in which the Debtor may take positions adverse to existing Spencer Fane clients.
  • Ravinia's prepetition efforts have yielded several potential bidders on the Debtor's assets, and the Debtor is in advanced discussions with a potential stalking horse candidate.
• The Debtor is seeking authority to use cash collateral to fulfill existing orders and work-in-process, sustain operations, and pursue a going concern sale to maximize creditor recoveries. As adequate protection, the Debtor proposes to furnish the SBA with junior replacement liens and monthly interest payments at the non-default rate, subject to anticipated postpetition financing. According to the Debtor, significant business opportunities remain available to Triple Sticks or an entity acquiring its assets, such that top line sales could double or more within approximately one year.
  • Without the ability to collect and use accounts receivable proceeds, the Debtor would be unable to pay employees, purchase inventory, or meet its customer obligations, and the business would face a forced liquidation yielding only de minimis recovery from incomplete and unpackaged food products.