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Citing the economic downturn, Chocolaterie Bernard Callebaut has gone into receivership. ((CBC))

Calgary-based Chocolaterie Bernard Callebaut has gone into receivership after 27 years of making chocolate treats.

"It's a funeral. I'm burying a 27-year-old baby, child," said an emotional Bernard Callebaut, a fourth-generation chocolatier who is originally from Belgium.

Callebaut explained that the economic slump devalued some land he had purchased for a new factory.

"This circumstance underpins our situation and is the impetus for this very difficult decision," he said.

The news comes less than three months after the privately owned company embarked on an ambitious expansion and investment plan.

In May, Callebaut was looking to raise $6.5 million through participating notes to make over existing stores, jump into the wholesale market and open new locations in Canada.

Leo Donlevy, who teaches at the University of Calgary's Haskayne School of Business, said it appears that growing the business got Callebaut into trouble.

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"Many businesses … bought very expensive real estate assets and other assets when times were good," Donlevy said. "And times went bad, and being the maker of a luxury product, sales probably went down and cash flow dried up, and [Callebaut] got in trouble with his lenders."

Chocolaterie Bernard Callebaut — which opened its first store in Calgary in 1983 — has 30 stores in four provinces, as well as in the United States. It is not affiliated with Barry Callebaut, the world's largest chocolate manufacturer, which is based in Switzerland.

The receiver, Deloitte, will oversee staffing, inventory and daily business during the restructuring process, but Callebaut said he intends to continue crafting chocolates in Calgary.

"I will find a way, whatever the way will be," said Callebaut.

Victor Kroeger, senior vice-president at Deloitte & Touche Inc., in Calgary, said the job of a receiver is to take over a company's assets and convert them into cash to pay creditors. While it's early in the process, the plan is to sell the company.

With files from The Canadian Press