Ample Hills Creamery files for bankruptcy

Ice cream parlor’s reasons include issues with its Red Hook factory

Ample Hills Creamery co-founders Brian Smith and Jackie Cuscuna with Ample Hills Creamery Gowanus at 305 Nevins Street (Smith and Cuscuna by Ilya S. Savenok/Getty Images for NYCWFF; Google Maps)
Ample Hills Creamery co-founders Brian Smith and Jackie Cuscuna with Ample Hills Creamery Gowanus at 305 Nevins Street (Smith and Cuscuna by Ilya S. Savenok/Getty Images for NYCWFF; Google Maps)

Ample Hills Creamery is melting down, but not quite liquidating.

The Brooklyn-based ice-cream maker filed for Chapter 11 in the U.S. Bankruptcy Court of the Eastern District of New York. Chapter 11 would give the company a chance to pare down its debt and reorganize its operations.

Ample Hills released a statement that described the filing as part of “the necessary next steps to preserve and ultimately bring Ample Hills into its next phase,” as well as a move that “allows us to restructure and refocus.”

“This is a strategic decision that allows us to course correct and continue doing what we love most: creating a delicious product from scratch, in our beloved Brooklyn home,” the company said.

An Ample Hills spokesperson had told The Real Deal early last month that the creamery “does not currently have any plans to file for bankruptcy.”

The popular ice cream parlor has 14 locations in the New York City area: six in Brooklyn, four in Manhattan, three in Queens and one in Jersey City. Its two locations in Florida are in Miami and Orlando.

The company had a branch in Los Angeles but announced in late January that it would close its Los Feliz location. In a post on its Instagram page, Ample Hills said it hoped to find a new location in the area. “While this decision was extremely difficult to make, we continue to look forward to existing and new expansion opportunities in the Southern California market and promise to stay in touch!” the company wrote.

Ample Hills filed for bankruptcy under two entities. Ample Hills Holding has between $1 million and $10 million in assets and between $10 and $50 million in liabilities, while Ample Hills Creamery has between $0 and $50,000 in assets and between $100,001 and $500,000 in liabilities, according to the filings. An affidavit filed with the bankruptcy says the company owes about $1.5 million to creditors and landlords.

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Married couple Brian Smith and Jackie Cuscuna began operating from a pushcart in 2010 and founded Ample Hills Creamery in 2011, and it has grown steadily since, becoming a staple for New Yorkers who love ice cream.

Ample Hills’ first shop, in Brooklyn, was a hit: Long lines formed and the “novice entrepreneurs” — as Smith and Cuscuna call themselves on their website — sold out of ice cream in four days and had to close temporarily. In short order, Ample Hills had a nationwide mail-order business, which counted Disney CEO Bob Iger among its fans. Ample Hills also opened a shop on Disney’s Boardwalk in Orlando.

Ample Hills grew quickly, taking on investors in fall 2015 and raising $4 million. But legal and construction setbacks in building a factory in Red Hook took a toll on the company, pushing back the opening by a year and a half and leading to cost overruns, according to court records.

“Because the Factory delays impacted Ample Hills’ expansion strategy, the Factory has not been as fully utilized as Ample Hills originally planned, which has led to continuing operating losses,” says an affidavit Smith filed.

It took Ample Hills 18 months longer than it expected to make the factory operational, and the company invested $6.7 million in it overall, which was $2.7 million higher than the initial budget, according to the affidavit.

“In practical terms, Ample Hills built out a factory in order to increase volume and lower its costs, but the opposite happened, and the losses have mounted,” the affidavit reads.

The entrepreneurs started shopping the business around and seeking new funding in the fall — talking for months with its landlord at the Factory, the O’Connell Organization, which previously sank $4 million into the venture. The company now hopes the bankruptcy filing will lead to a sale, according to court documents.

Ample Hills’ bankruptcy filing comes on the heels of New York’s famed Fairway Market taking the same step. The popular grocery store chain filed for Chapter 11 on Jan. 23, saying it had entered into an agreement with Village Super Market to sell up to five of its stores and its distribution center for about $70 million.

Write to Eddie Small at