In recent unstable economic conditions, most of us have witnessed successful companies fail as a result of unforeseen adverse circumstances. Michigan readers may recall the involvement of the peanut giant Sunland Inc. in the countrywide salmonella outbreak of late last year. Product recalls proved to be the final nail in its coffin, and Sunland Inc. filed for the protection of Chapter 7 bankruptcy after that.
With Chapter 7 bankruptcy, the unsecured property of the debtor is sold to pay dischargeable debt. It also protects the filer from foreclosures, repossessions and garnishments while bankruptcy proceedings are pending. Protection also exists regarding liens, lawsuits and any creditor harassment . Sunland's assets were estimated at approximately $50 million in previous court filings, but three of the company's creditors regarded this as a potentially inflated figure.
A federal bankruptcy judge received an application for approval of a purchase offer made by Ready Roast Nut Co. to acquire Sunland Inc. The prospective buyer made an offer of $18.5 million for the purchase of Sunland's assets. The attorneys for the court-appointed trustee reported that this was the highest proposition received to date.
The protection of Chapter 7 bankruptcy is not only available for businesses in Michigan and elsewhere. Individuals who find themselves in a troubling financial situation may also apply for this protection. Typically, Chapter 7 bankruptcy is for the benefit of people who wish to achieve a fresh start by a court supervised liquidation of assets for the benefit of existing creditors. The discharge of debts typically affords individuals and companies the chance to reconstruct a stable financial future without the constant harassment of creditors.
Source: kanw.com, Calif. Co. Seeks NM Peanut Butter Plant for $18.5M, No author, Feb. 11, 2014