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North Carolina Company Hopes To Buy Bankrupt Peanut Plant

Mon, 03/24/2014 - 11:53am

ALBUQUERQUE, N.M. (AP) -- A North Carolina company is hoping to buy an eastern New Mexico peanut butter plant that went bankrupt after a salmonella outbreak shuttered its operations and prompted a nationwide recall.

Hampton Farms of Severn, N.C., apparently made the winning bid of $20 million in an auction Thursday for the Sunland Inc. plant in the town of Portales. But a hearing to finalize the sale has been delayed until Monday afternoon in bankruptcy court in Albuquerque.

Hampton Farms officials, who already operate a peanut shelling and packing company in Portales, told the Albuquerque Journal they intend to reopen the plant.

"We currently produce peanut butter products at two facilities in North Carolina, which are distributed across the entire U.S.," Tom Nolan, a company vice president told the Albuquerque Journal. "The Portales facility would enable Hampton Farms to produce peanut butter in New Mexico, closer to both the source (growers) and our customers in the U.S."

Sunland processed Valencia peanuts, a sweet variety of peanut that is unique to the region and preferred for natural butters because it is flavorful without additives. It was the nation's largest organic peanut butter plant, and its shutdown following the salmonella outbreak in late 2012 left many stores scrambling for months to find alternative natural peanut butters.

The plant reopened in May. But it filed for bankruptcy and closed in October, apparently unable to recover from the financial hit of an eight-month shutdown and lawsuits from the salmonella outbreak.

This year, the bankruptcy trustee for Sunland had requested that the court approve selling the eastern New Mexico company to Ready Roast Nut Co. of Hughson, Calif., for $18.5 million.

But Hampton Farms apparently came in with a larger bid.

Sunland attorneys had valued the company's total assets at $50 million when it sought bankruptcy protection last fall.

The company owes its three major secured creditors about $14 million.

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