By Neal Morton From My USA

Tootie Pie’s apple pies contain 10 apples each, weigh about 6 pounds and provide the Boerne-based dessert maker with about 55 percent of its business.

The dessert has won the company numerous accolades, and sales have risen more than 300 percent since it went public six years ago. Still, Tootie Pie has never tasted true success.

Instead, it has posted a string of annual losses and defaulted on loan and lease payments. And now it’s bankrupt.

The company filed for protection from its creditors last week in San Antonio.

On Friday, the board of directors of Tootie Pie Co. Inc. ousted CEO Don Merrill Jr. and replaced him with Leslie Doss, one of the company’s early investors and an economics professor at the University of Texas at San Antonio.

Merrill did not return calls for comment.

“We had no choice,” Doss said. “Now, we are going to be able to move forward and get more capital infusion. It seems like we’re going to be OK.

At a small warehouse in Boerne, Tootie Pie bakes and freezes 13 varieties of pies, including a new chocolate-dipped slice. The company also has experimented with nontraditional flavors, such as buttermilk. It has 28 full- and part-time employees working at its factory and four retail cafes in Texas.

The company distributes pies to 48 states, and its corporate clients, including Frost Bank and JPMorgan Chase, often place big orders to treat their customers or employees.

In an emergency hearing Friday, Tootie Pie sought a $50,000 loan from two members of its board in order to pay its employees. A bankruptcy judge allowed the loan over objections from the company’s main creditor, TCA Global Credit Master Fund.

Tootie Pie owes the Cayman Islands limited partnership about $400,000, according to court records.

In its objection, TCA criticized Tootie Pie for filing for bankruptcy the day before the Fourth of July, saying “this gamesmanship” was an attempt to keep TCA and Tootie Pie’s other creditors out of the process.

Overall, the pie company listed nearly $1 million in debts, with assets less than $50,000.

“Our (largest) creditor is now no longer capable of closing us down,” Doss said of TCA. “They were a very big check every month.”

Court records show that Tootie Pie was paying TCA about $60,000 a month.

Tootie Pie said it loses money six months out of the year because of the season nature of the industry and that it could not make loan payments during that time. However, TCA filed a lawsuit against Tootie Pie in a Florida state court in February claiming that the company first failed to make repayments in October, the start of Tootie Pie’s busiest season.

In a previous interview with the San Antonio Express-News, Merrill acknowledged the company’s financial struggles. But he planned to increase the number of its retail cafes in the hope of reducing production overhead and increasing revenues and profit margins.

However, Merrill did not rule out selling the company, and Doss said he has already fielded phone calls from parties interested in investing in Tootie Pie.

In February, Tootie Pie hired an investment banking firm in New York City to review any proposals that comes its way.

“Is this the end? Oh, my God, I hope not. I mean, I don’t think so,” Doss said. “Our best two quarters start in July and October. I guess you could say we filed for bankruptcy at the appropriate time.”

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Twitter: @nealtmorton

Express-News archives contributed to this report.

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