Forward Foods files for bankruptcy
February 17, 2009
by Eric Schroeder
MINDEN, NEVADA — Fallout from the peanut-related recall took another downturn Tuesday with the announcement by Forward Foods L.L.C. that it has filed for Chapter 11 bankruptcy protection. Forward Foods makes Detour energy bars, which were forced to be recalled after a tainted peanut recall by its supplier, Peanut Corporation of America.
Forward Foods, which manufactures high protein, snack, energy and meal replacement bars, was notified on Jan. 29 that its products were subject to a nationwide voluntary recall with regard to a Salmonella poisoning risk. As a result, the company was forced to recall several of its Detour brand products, sales of which make up approximately 75% of all protein bar sales by Forward Foods.
"The cost of this recall to this business … is material," Forward Foods said in a Feb. 17 bankruptcy filing with the U.S. Bankruptcy Court for the District of Delaware. "A significant value of inventory must be condemned, and, to the extent customers are appropriately destroying or returning unsold recalled product, the ability to collect outstanding receivables is very much at risk."
Forward Foods is primarily owned by private equity firm Emigrant Capital Corp. The company employs 52 people and regularly employs 25 to 30 temporary workers through a placement service, depending on the volume of business.
The company listed both assets and debts of between $10 million and $50 million.