New York readers may be interested to know that food processor Allens Inc is in bankruptcy, but has promised to pay all of its vegetable suppliers for any goods they purchase. This Chapter 11 filing will allow the company to continue operating as it restructures its debt.
The Arkansas-based Allens, which also goes by the name Allens Canning Company, is primarily known for canned vegetable products sold under the brands of Veg-All and Popeye Spinach. It filed for debt reorganization in October and set up a webpage that offers explanations to both customers and creditors. On its website, Allens stated that it intends to pay for any goods or services received at its facilities after the filing date. Bankruptcy law prohibits the company from paying debt incurred prior to the filing. Allens listed debts in the range of $100 million and $500 million.
The website offers links for creditors who wish to file for any pre-bankruptcy monies owed to them. There is also a link so anyone who wishes to can keep track of the various motions being filed in the case. Most of the creditors are suppliers of fresh produce. The produce doesn’t reach the consumers as fresh product, but according to a spokeswoman for the Agricultural Marketing Service of the U.S. Department of Agriculture, the sellers are protected by the Perishable Agriculture Commodities Act.
Chapter 11 bankruptcy is often used to allow a struggling company to restructure its debt while it continues with operations. Under a well-conceived reorganization plan, a company may be able to emerge from the bankruptcy in a better financial position with many of its assets intact.
Source: The Packer, “Allens Inc. files Chapter 11; promises to pay for produce“, October 31, 2013by