PORTALES, N.M. — Sunland, Inc., the peanut processor that was at the heart of a food-borne illness outbreak and related recall in October 2012, filed for Chapter 7 bankruptcy protection in the U.S. Bankruptcy Court for the District of New Mexico on Oct. 9.
The company said operations at its processing plant have ceased and a Chapter 7 trustee will be appointed to manage the company’s affairs.
“All future decision to operate, sell or otherwise liquidate the company’s plant and other assets will be made as part of the bankruptcy proceedings by the trustee, not by the company or its management,” the company said.
The filing was precipitated by a series of difficult events over the past year that negatively impacted the company’s finances. Sunland voluntarily recalled all of its products in October 2012 due to Salmonella contamination in some of its products. In November 2012, the Food and Drug Administration suspended the company’s food facility registration, thus barring it from distributing its products into the marketplace. It was the first time the F.D.A. used its authority to revoke a company’s facility registration.
In May 2013, Sunland received authorization from the F.D.A. to resume full operations. Despite resuming operations, the company said ongoing financial and liquidity challenges made it necessary for management to file for bankruptcy.