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Friendly Ice Cream cancels auction

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December 22, 2011|By Jenn Abelson

Bankrupt Friendly Ice Cream Corp. has canceled an auction scheduled for tomorrow because the Wilbraham company has received no bids to compete with the $75 million offer made by an affiliate of its owner, Sun Capital Partners Inc.

No other bids were made by Tuesday’s deadline so Friendly’s assets are expected to go to an affiliate of the private equity firm. A hearing to approve the deal is set for next Thursday, according to yesterday’s filing.

Sun Capital said: “We are pleased to be in a position to regain ownership of Friendly’s, which will allow us to preserve the company.’’

Friendly’s officials could not be reached for comment.

Earlier this month, a federal agency that insures company pension plans accused Sun Capital of fraudulently moving assets so that its affiliates could retain control of the Wilbraham business and avoid paying retirement benefits to nearly 6,000 workers and retirees.

About four years after Sun Capital acquired the chain, Friendly’s filed for bankruptcy protection and abruptly shuttered more than 60 stores in October.