Judge orders troubled bakery to liquidate

Police raid, debt, health code violations spell end for Your Black Muslim Bakery

The San Francisco Chornicle/August 10, 2007
By Carolyn Jones

A federal judge on Thursday ordered Your Black Muslim Bakery, a 40-year-old purveyor of all-natural desserts that has been linked to the slaying of an Oakland journalist, to liquidate its assets.

U.S. bankruptcy Judge Edward Jellen rejected a request by the troubled Oakland bakery to dismiss bankruptcy proceedings, saying the bakery's management problems are getting worse, not better.

"I think every fact dictates in favor of Chapter 7," he said. "The circumstances are the same or worse than they have been. Management problems are certainly no better."

The business is more than $900,000 in debt to the IRS, individual creditors and Davis Mortgage Investment Fund of Oakland. Its assets are about $1.9 million, according to its Chapter 11 bankruptcy filing in October.

The bakery's chief executive, Yusuf Bey IV, 21, is in custody on kidnapping charges after his arrest Friday in a police raid on the bakery, which was shuttered.

Another bakery employee, handyman Devaughndre Broussard, 19, was later arrested and police say he confessed to last Thursday's slaying of journalist Chauncey Bailey, editor of the weekly Oakland Post, who was investigating the bakery's bankruptcy proceedings.

Jellen ordered the bakery to enter Chapter 7 in July. But Bey asked the judge to reconsider because a potential buyer had been found.

Attorney Fayedine Coulter, who represents the bakery, did not identify the buyer at Thursday's hearing in Jellen's Oakland courtroom.

"Because of the newsworthiness of this case, people are withdrawing their names and support. But they do exist," she said. Coulter had no further comment on the case.

According to court documents and public records, Your Black Muslim Bakery owes about $200,000 to the IRS; $100,000 to a creditor, Richard Stovall; and $11,000 to another creditor, Patricia Hill. In 2005, the bakery borrowed $625,000 from an Oakland mortgage company, Davis Mortgage Investment Fund.

The bakery did not file W-2 forms to the IRS in 2005 or 2006, and other filings showed discrepancies in wages paid to employees, Patricia Montero, an IRS attorney, told the judge Thursday.

The bakery was closed Aug. 3 by the Alameda County Health Department for health code violations. It is also under investigation by the state Department of Fish and Game for allegedly allowing grease to leak into a storm drain.

Coulter said the bakery's troubles stem from the inexperience of Bey IV, who took over the business after his father died in 2003. Bey blamed the cash-flow problems on payments due to his father's dozens of heirs from "several wives," according to court documents.

In her plea to restructure the business, Coulter said the bakery would renew its contracts with the Oakland Coliseum and Oakland and San Francisco airports, arrange to sell the business and refinance to pay back its debt.

Your Black Muslim Bakery was opened in 1968 by Yusuf Bey, who believed that African Americans needed all-natural food. He became well known in Oakland for his bean pies, sweet rolls and carrot cakes. He died of colon cancer four years ago while awaiting trial on criminal charges of raping a girl.