The new owner of New England Confectionery Company, the US candy firm which was acquired out of bankruptcy this spring, is reportedly at the centre of a dispute over payments for the business.

According to The Boston Globe newspaper, the trustee of the candy supplier and its new owner, US-based Round Hill Investments, disagree about the terms of the final payment.

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Revere, Massachusetts-based New England Confectionery Company, also known as Necco, filed for Chapter 11 bankruptcy in April.

Round Hill – through the Sweetheart Candy Co. entity owned by the Metropoulos family – agreed to pay US$17.3m for the company after the winner of the 23 May bankruptcy auction, Spangler Candy Co., failed to conclude the deal.

But now Round Hill is reportedly being accused of trying to back out of a final payment of $1m by claiming it did not know about a warning issued to Necco regarding serious health code violations.

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The Boston Globe reported Round Hill is being sued for breach of contract and unfair and deceptive business practices by the court-appointed trustee handling Necco’s bankruptcy case.

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In a complaint filed in US Bankruptcy Court in Boston, trustee Harry B. Murphy said Round Hill claimed it was unaware of the warning that was issued to Necco by the Food and Drug Administration in May, according to the newspaper. 

The warning had to do with serious health code violations, including rodent faeces found in various areas where candy was produced late last year.

Murphy disputes that claim, the newspaper reported.

He filed the complaint against Round Hill on 3 July, after the company missed its deadline to pay the first of four $250,000 instalments as part of iys purchase of Necco, according to the newspaper.

just-food has asked Round Hill for a response to the newspaper’s story.

Necco’s product portfolio includes Necco Wafers, Clark Bars and Mighty Malts.