Citing concerns over the Salyer American Fresh Foodsâ financial status, banks arenât lending the company money to pay growers for crops under cultivation, heightening concerns about the future of the company.
Steve Franson, the court-appointed receiver who took over the failing company in early May, released a statement May 19 that he was told by Salyer Americanâs primary lenders âthat they would not advance (the company) any additional fundsâ because they stand to lose âsignificant sums of money to defaults.â
Franson said inÂ the statement that he feels âsorry for the growers and employees who have been loyal toâ Salyer American, but that he would not speculate on the cause of the companyâs financial troubles, or those of its sister company, SK Foods, which is undergoing bankruptcy proceedings.
According to a source at the company, Franson will not comment further on the issue, and he has not accepted calls from The Packer since appointed by the court in early May.
According to the statement, Franson over will be collecting money over the next several months for accounts receivable, securing and selling Salyer Americanâs assets that are subject to liens, evaluating and paying legitimate claims of growers who sold commodities to or through Salyer American, and paying other legitimate debts.
The company told its growers to stop all planting in late April.
Lenders claim Salyer American hasnât paid back a $35 million made in 2007. Salyer American reportedly cut seven positions May 15 and may close based on Fransonâs determination.
SK Foods and a tomato processor it owns, RHM Industrial Specialty Foods, Williams, Calif., are in Chapter 11 bankruptcy proceedings with its own lenders, who are trying to recover $130 million they lent the SK Foods in 2007. SK Foods wants to sell the tomato processor by July before peak production starts, according to company owner Scott Salyer.