PORTALES — More documents filed recently in the Sunland bankruptcy case indicate the defunct peanut processor spent weeks planning a Chapter 11 reorganization before deciding to shut it down and seek Chapter 7 protection.
Other filings in federal bankruptcy court indicate at least two of Sunland’s three major creditors believe the company has inflated its assets, the Clovis News Journal reported.
Sunland closed its doors Oct. 9 owing $15.4 million to three secured creditors, retail giant Costco, CoBank of Denver and Production Credit, according to court records.
Those same records indicate Sunland still has cash in the bank amounting to about $4 million.
Sunland estimates its total assets at $49.4 million, including buildings and equipment. An attorney for CoBank and Production Credit of Southern New Mexico called Sunland’s estimates “wildly optimistic” in a document filed Monday in U.S. Bankruptcy Court in Albuquerque.
The disclosures on bankruptcy planning are found in documents filed by attorney Thomas Walker, who represents the trustee charged with liquidating Sunland’s assets and distributing proceeds to creditors.
A Chapter 11 bankruptcy is a reorganization plan that allows a company to continue functioning with creditors agreeing to accept less, often significantly less than they are owed.
Chapter 7 bankruptcy closes the doors and a trustee is appointed to sell off assets and distribute the money among creditors.
Also among the most recent filings, a demand from Tifton Quality Peanuts in Tifton, Ga., that it be able to reclaim what’s left of almost 200 tons of peanuts sold to Sunland from August through September with an estimated value of $340,560.
Berlin Packaging of Chicago filed a demand for return of goods on Monday, submitting invoices totalling $817,476 for canisters, jars and other containers delivered to Sunland from Aug. 28 to Oct. 9.