Even though there is uncertainty of who will become Sunland Inc.’s new owner, both potential buyers said they have plans to reopen the plant and operate in Portales.
The question of ownership of the defunct peanut processing plant came into play Monday when Sunland Inc. trustee Clarke Coll asked U.S. Bankruptcy Court Judge David Thuma to let him consider a last-minute $25 million offer from Golden Boy Foods of Canada over the high bid of $20 million offered by Hampton Farms during closed bidding Thursday.
Coll said the substantially higher offer could mean the difference between whether or not unsecured creditors will get any payments from the liquidation of Sunland Inc., which filed for bankruptcy last year following the 2012 salmonella outbreak that prompted a nationwide recall and shuttered its operations for eight months.
North Carolina-based Hampton Farms tendered the high bid. However, just before the auction results were to be finalized during a court hearing Friday, Coll received a call from Paul Henderson of Canada’s Golden Boy Foods with a $25 million cash offer for the plant.
“Initially, I thought it was a joke,” Coll told the court.
But the company has since wired the cash to a title company and is prepared to close Friday.
Thuma said he hoped to decide this morning whether to let Coll consider the new offer.
Hampton Farms officials, who already operate a peanut shelling and packing company in Portales, told the Albuquerque Journal they intend to reopen the plant.
“We currently produce peanut butter products at two facilities in North Carolina, which are distributed across the entire U.S.,” said Tom Nolan, a company vice president. “The Portales facility would enable Hampton Farms to produce peanut butter in New Mexico, closer to both the source (growers) and our customers in the U.S.”
Golden Boy Foods, which operate four nut butter plants in Canada and the U.S., is singing a similar tune.
“They intend to keep and operate the plant in Portales,” Coll said.
Sunland President Jimmie Shearer and other community members indicated last week that Hampton Farms would be a good fit for the community considering it already has a location it ships to in Portales and its a name that community members know.
The community was shaken when Sunland filed for bankruptcy in October, shutting its doors after 25 years of business in Roosevelt County.
Sunland employed more than 100 workers.
“What we want to see is the plant back open so that it helps local farmers and brings local jobs,” said Roosevelt County Chamber of Commerce Director Karl Terry in an interview last week.
Henderson, president of Golden Boy’s nut butter division, said he had been interested in Sunland from start, but had to drop out because his company was in the process of being purchased by Post Holdings. After the sale was complete in February, he said that he thought, based on news reports, that Sunland was on track to be bought by a third company, Ready Roast Nut Co.
Two days before the auction, he said he found out otherwise, and he and his boss scrambled to put together the offer.
Attorneys for North Carolina-based Hampton Farms, argued that Golden Boy came to the table too late, and that to invalidate an auction where proper procedures had been followed would jeopardize the integrity of the system.
Sunland attorneys had valued the company’s total assets at $50 million when it sought bankruptcy protection last fall.
The company owes its three major secured creditors about $14 million.
— Staff and wire report