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Judge considers new cash offer for peanut plant

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sunlandA federal judge Monday considered whether to allow a bankruptcy trustee to accept a last-minute cash offer for a defunct peanut butter plant in eastern New Mexico.

U.S. Bankruptcy Court Judge David Thuma presided over a hearing in Albuquerque on whether to invalidate last week’s auction for Sunland, Inc., which filed for bankruptcy following a salmonella outbreak that shuttered its operations and prompted a nationwide recall.

North Carolina-based Hampton Farms had the winning bid of $20 million. But just before the auction results were to be finalized during a court hearing Friday, trustee Clarke Coll received a call from Paul Henderson of Canada’s Golden Boy Foods with a $25 million cash offer for the plant.

Golden Boy Foods has since transferred that money to a title company and stands ready to purchase the plant.

The judge is considering whether to let the trustee take the higher offer, but it was not immediately clear whether a decision would be made Monday.

Coll said the extra $5 million has the potential to result in a payout for unsecured creditors.

Hampton Farms officials, who already operate a peanut shelling and packing company in Portales, have said 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 operates four nut butter plants in Canada and the U.S. and sources its supplies from around the world, according to its website.

Sunland processed Valencia peanuts, a sweet variety of peanut that is unique to the region and preferred for natural butters because it is flavorful without additives. It was the nation’s largest organic peanut butter plant, and its shutdown following the salmonella outbreak in late 2012 left many stores scrambling for months to find alternative natural peanut butters.

The plant reopened in May. But it filed for bankruptcy and closed in October, apparently unable to recover from the financial hit of an eight-month shutdown and lawsuits from the salmonella outbreak.

This year, the trustee had requested the court approve selling the eastern New Mexico company to Ready Roast Nut Co. of Hughson, Calif., for $18.5 million. But Hampton Farms apparently came in with a larger bid during the auction.

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.

Information from: Clovis News Journal, cnjonline.com

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