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Newman’s Own is facing a federal lawsuit in Connecticut after a former manufacturing partner accused the food brand of breaching a co-packing agreement tied to the production of cream-filled sandwich cookies.

Avatar Foods and its subsidiary Tuscany Cookies LLC filed the complaint on Monday, alleging that large-scale production issues caused the partnership to unravel, leaving the companies with unpaid invoices, excess inventory, and significant financial losses. The plaintiffs are seeking damages of at least $2 million, along with legal fees and costs.

According to the lawsuit, the dispute centers on a co-packing agreement amended in November 2024, under which Avatar was responsible for manufacturing, packaging, storing, and shipping cookies based on specifications provided by Newman’s Own. Production was set to take place at Avatar’s facility in Gridley, California.

Avatar claims it later discovered that the cookie formulation supplied by Newman’s Own was not suitable for large-scale commercial manufacturing. The complaint alleges the specifications were incomplete and lacked technical details necessary for industrial production, particularly regarding the cream filling, which the plaintiffs say could not be processed using standard equipment.

The lawsuit states that Newman’s Own assured Avatar the products were commercially viable and attributed prior manufacturing failures to equipment limitations at earlier facilities. However, Avatar alleges that repeated attempts to scale production revealed fundamental formulation issues that made mass production impractical.

After alerting Newman’s Own to the problem, Avatar says the parties discussed several options, including revised pricing or relocating production. The lawsuit alleges Newman’s Own chose to continue development at Avatar’s facility, leading to months of testing, reformulation, and last-minute changes.

Avatar claims it spent more than $500,000 developing alternative formulations while also dealing with supply chain delays and equipment inefficiencies. Despite these challenges, the company says it ultimately produced more than 112,000 units of cookies by mid-November 2025 under revised specifications approved by Newman’s Own.

The plaintiffs allege Newman’s Own accepted and sold the cookies but failed to pay more than $1.18 million in outstanding invoices. They also claim the company refused to accept nearly 20,000 additional cases of finished product and raw materials that cannot be resold under the terms of the agreement.

In response, a spokesperson for Newman’s Own disputed the allegations, stating the company ended the partnership after determining Avatar failed to meet contractual obligations and quality standards.

“The large-scale production failures described in the complaint stemmed from Avatar’s operational issues,” the spokesperson said, adding that the company is prepared to defend itself in court.

The case was filed in the U.S. District Court for the District of Connecticut. Newman’s Own has not yet named legal counsel in the matter.