Peanut Butter Plant Sunland to Liquidate in Chapter 7 Bankruptcy

PORTALES, N.M.Sunland, Inc., the peanut butter processor that was tied to a 2012 Salmonella Bredeney outbreak that sickened 42 people in 20 states, plans to liquidate its assets under a Chapter 7 bankruptcy.

Twenty-five-year-old Sunland on Wednesday announced the bankruptcy filing and said operations at its plant have ceased.

The company listed assets of $10 million to $50 million and liabilities of $50 million to $100 million, according to The Associated Press.

It has been a difficult 12 months for Sunland.

The company recalled its products about a year ago as local, state and federal authorities investigated an outbreak of Salmonella that was traced back to Sunland.

The recall was expanded nearly 10 times to include more than 100 brands and nearly 250 products including Trader Joe's peanut butter.  

The U.S. Food and Drug Administration (FDA) last year suspended Sunland's operations, invoking new powers under the Food Safety Modernization Act. Sunland later entered into a consent decree, a move that required the plant to implement a number of food-safety measures to the satisfaction of FDA before it was authorized to process or distribute food from its peanut butter plant.

Although Sunland resumed operations in May 2013, the company cited "ongoing financial and liquidity challenges" that compelled it to file bankruptcy.

The news signaled a blow to the community of Portales, which Sunland noted is known as the "Valencia Peanut Basin of the Nation".

"It's a pretty sad day for Portales and I think it's a sad day for the idea of free enterprise," Karl Terry, Roosevelt County Chamber of Commerce Director, said in a Clovis News Journal article that was posted Oct. 9.

One local official appeared to pin the blame for the plant's demise on federal regulators.  

I blame the FDA for the majority of the problems; the regulations, it was just a bad deal," Roosevelt County Commission Chairman Bill Cathey told the Clovis, N.M.-based paper.