Pepper Foster, KUB bread’s celebrated saviour, accused of creating financial disasters for partners Small bakeries in Selkirk, Winnipeg dealing with broken promises, unpaid bills linked to Pepper Foster’s plan to resurrect KUB name By: Malak Abas Posted: 6:56 PM CST Thursday, Jan. 18, 2024

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A Selkirk bakery owner says he’s been burned by Winnipeg entrepreneur Pepper Foster, the latest in a list of Manitobans alleging the man made famous for his tie-dyed clothing isn’t paying his bills.

Sheldon Pescitelli, who owns Upper Crust Bakery in Selkirk, said he provided Foster with financial control of his bakery in November after partnering with him in baking KUB bread.

Last January, Pepper Foster and his twin, Chip, who gained international fame in the 1980s and ’90s for their surf-inspired tie-dyed apparel, announced they would be purchasing the beloved Winnipeg KUB brand.

A year later, Pescitelli said he was forced to close his bakery’s doors for nearly two weeks after he stopped receiving cheques for staff, and payments made via credit card to his flour supplier were declined.

“Pepper just kept stringing us along that pay would come next week, next week, next week,” Pescitelli told the Free Press this week. “He was convincing me to convince (my staff) that it was just rough waters at the beginning.”

Manitoba court records show Pepper Foster is facing at least two lawsuits for unpaid bills owed to two Winnipeg law firms totalling approximately $33,000.

Several other sources told the Free Press earlier this month they also had been stiffed on bills owed by the Foster brothers.

Problems with Pepper Foster began almost immediately after Upper Crust partnered with him in the fall, Pescitelli said.

The plan was for Pescitelli to produce KUB bread and sell it in Selkirk first, with hopes of expanding.

Foster agreed to pay for Upper Crust’s bread-making equipment, pay Pescitelli’s salary to manage KUB and give him shares of the KUB brand. In exchange, Foster took financial control of Upper Crust.

“Just coming out of COVID and everything, I was getting pretty close to closing, that’s why we joined up together. I needed something a little bigger,” said Pescitelli, who began his baking career at KUB at the age of 15, and then purchased Upper Crust with his wife 13 years ago.

“I teamed up to try and save the bakery.”

However, Pescitelli said he received only a small portion of equipment payments, and he and three Upper Crust employees, including his son, stopped getting paycheques. As of Wednesday, he said they hadn’t been paid in nearly six weeks.

Pescitelli said he doesn’t plan to take legal action, because of the cost of hiring a lawyer. He decided to speak out after learning Foster’s food-production and distribution organization, Authentic Food Group, included Upper Crust as part of its portfolio.

Pescitelli worries Foster used his name to seek investors without his knowledge.

He reopened Upper Crust Thursday, paying for ingredients out of his own pocket and taking only cash payments to deposit back into a bank account he controls.

Foster refused to comment on Pescitelli’s allegations Thursday afternoon, saying he would “have to talk to (his) accountant.”

He said Upper Crust had dealt with long closures in the past before he stepped in to provide support.

“We’re just getting our feet wet,” Foster said. “With the information I have, I’m doing the best I can with the ability I can with with my team.”

He said he wanted to continue working with Upper Crust.

“If money’s due, we’ll make it right,” he said.

Pescitelli noted Chip Foster, whom he met just once, had no part in the partnership with Pepper Foster.

Upper Crust isn’t the only Manitoba bakery Pepper Foster is involved with.

He became the co-owner of Pennyloaf Bakery on Corydon Avenue in June 2022, going into business with James Fiebelkorn.

But Pennyloaf has been closed since Dec. 24, with social media posts pointing to renovations as the reason.

However, a staff member who previously worked for the bakery told the Free Press that the bakery closed after most of the staff, including all of the bakers, quit en masse because of Foster and his wife, Vanessa Foster, who helped run the business.

Among other issues, the staff member said Pepper Foster would regularly come in and take products to give away, impacting day-to-day operations.

“(It was) sometimes to the point of us not being able to fulfil standing orders,” the employee said. “We had to then make calls to these businesses and apologize, because (Pepper and Vanessa Foster) just had no respect for the fact that we were trying to run this bakery a certain way.”

Fiebelkorn said Pepper Foster has a 50 per cent equity in the company, but was brought in to help generate sales and did not invest any money or receive any pay.

When the business struggled — in part, Fiebelkorn said, due to Foster’s mismanagement — he went to Foster seeking financial investment and was turned down.

Fiebelkorn said he is proceeding with legal action against Foster.

“I was covering payroll, (meeting) payments, et cetera, out of pocket. I did not see that they had provided any value, and as such, (a) legal cash call was issued as provided by the shareholders agreement,” he told the Free Press. “I would like to reopen, but my hands are tied due to the legal situation.”

When contacted by the Free Press, Vanessa Foster said she and Pepper are “looking for a path of resolution” and hope to reopen Pennyloaf.

— with files from Tyler Searle

malak.abas@freepress.mb.ca