PORTALES — The Portales City Council has authorized officials to consult with a bankruptcy attorney regarding “Sunland bankruptcy issues.”
Portales City Manager Doug Redmond told the Portales News Tribune it will allow councilors to get an opinion from a bankruptcy attorney in the city’s efforts to recoup the $150,000 in economic development funds it lent the defunct peanut processing giant.
“We would like to see if the city has a superior claim to recover Local Economic Development Act funds,” Redmond said.
LEDA funds are a portion of the city’s gross receipts used to pay for local projects and studies that support economic development.
As it turns out, the city awarded Sunland the LEDA funds about a month after the company’s board of directors adopted resolutions in April to start bankruptcy proceedings.
Sunland filed for bankruptcy Oct. 8, citing the financial impact of a government-enforced shutdown after its products were tied to a nationwide salmonella outbreak in the fall of 2012.
Redmond said Sunland officials never said anything about bankruptcy or money problems during negotiations for the funds that began in early March.
A few of the councilors are set to meet on the issue Monday.