Bankruptcy proceedings have started against SK Foods LP, Monterey, Calif., even as company officials were in negotiations to sell it.
SK Foods and a division, RHM Industrial Specialty Foods Inc., Woodland, Calif., was preparing a Chapter 11 reorganization plan when lenders started involuntary bankruptcy proceedings on May 5, according to a May 7 statement from SK Foods’ attorney Gerard Rose.
Rose was unavailable May 7, and it was unclear if lenders intend to liquidate the company.
The two companies are in discussions with their lenders to “obtain interim financing to permit them to continue operations during the course of the bankruptcy proceedings and to prepare for the upcoming tomato packing season,” the statement said.
“The most important thing to me is that there is no loss of jobs and that the buyers receive a fully operating company,” said SK Foods chief executive officer Scott Salyer, in the statement.
SK Foods is optimistic it can acquire funding from the banks to keep its plants operating, the statement said, and is working to retain its employees while going up for sale in the bankruptcy proceedings.
Investment bankers representing SK Foods “have already been in extensive discussions with several prospective buyers,” according to the statement.
It is unclear how SK Foods’ bankruptcy will affect its other business, Salyer American Fresh Foods, Monterey, which is now under the control of a court-appointed receiver after three lenders sued the company for failure to pay a $35-million loan.