What Did Bruce Rauner Do to Cherrydale Farms?

Cherrydale Farms is a Pennsylvania-based company which survived the Great Depression and two World Wars. But it couldn't survive Bruce Rauner.

Less than five years after Rauner and his investment group took control of Cherrydale Farms, the century old family business was in bankruptcy.

Rauner is currently locked in a tight battle for Illinois Governor against incumbent Pat Quinn.

Cherrydale Farms was founded in 1907 by Esther Cherry who began selling hand-made candies and other items to her neighbors. In the 1930s the company discovered a new distribution channel for its candies and related products when it began working directly with schools and charity groups and offered its services as a fundraising vehicle. The family's decision helped the company weather the Depression and the fundraising specialty soon became the core of Cherrydale's business model.

By 1986 the company had annual sales of $15 million and a new candy making plant was opened in Pennsburg, Pennsylvania. Annual sales would eventually approach $100 million.

Then in 1994 the Cherry family sold a majority stake in their company to Rauner's private equity firm, then known as Golder, Thoma, Cressey, Rauner, Inc. -- now simply GTCR, LLC.

As part of the take-over, Rauner put himself on the Board of Directors of Cherrydale Farms.

Catastrophe followed.

On March 15, 1999, just five years after Rauner took over, the company filed for bankruptcy. Under Rauner, the company had become loaded down with debt -- $50 million to $100 million worth according to U.S. Bankruptcy Court filings.

But thankfully this story has a happy ending.

The Cherry family came back and rescued Cherrydale from Rauner and his pals. Certain liquidation was avoided and Cherrydale Farms still thrives today -- absent Bruce Rauner needless to say.

What are the details of Rauner's mismanagement? It's hard to say for certain. Cherry family members seem more interested in the future and serving their customers than in pointing fingers about the past.

But we do have these quotes from Ross Cherry, who became Co-President in 1999 in conjunction with the family's buy-back. Ross is the great grandson of company founder Esther Cherry.

"It's something that never, ever, should have happened," said Ross Cherry, who called rescuing Cherrydale the "biggest emotional issue of my life."

Asked about the previous managers at the company, Cherry said, "They will not be with the company, clearly. There's no question about it. The old management team is back."

So major kudos to the Cherrys. Rescuing a family run business from Bruce Rauner & Friends is a very inspirational story.

We can only hope Illinois will be so lucky.

Doug Ibendahl is a Chicago Attorney and a former General Counsel of the Illinois Republican Party.