NM Peanut Butter Plant Closes, Files For Chapter 7

PORTALES, N.M. (AP) -- An eastern New Mexico peanut butter plant involved in a nationwide salmonella outbreak last year closed its doors and filed for bankruptcy Wednesday.

Officials with Sunland Inc., the nation's largest organic peanut butter processor, said "ongoing financial and liquidity challenges made it necessary for the company to file for bankruptcy under Chapter 7 of the bankruptcy code."

Chapter 7 means the company shuts down and liquidates its assets. According to the bankruptcy filing, Sunland has an estimated $10 million to $50 million in assets, $50 million to $100 million in liabilities and 1,000 to 5,000 creditors.

The Food and Drug Administration shuttered the plant in September 2012 after its products were linked to 41 salmonella cases in 20 states. Most of those were linked to natural peanut butter the company made for Trader Joe's.

Sunland recalled more than 100 nut and peanut butter products after the outbreak.

The shutdown left many stores scrambling for months to find alternative natural peanut butters.

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.

The plant also made peanut butter under a number of different labels for retailers like Costco, Kroger and Trader Joe's, along with nut butter products under its own name.

Sunland reopened last May, but reportedly took a big financial hit from the eight-month closure and lawsuits that followed the salmonella outbreak.

The company had about 100 employees, who were notified Wednesday that the plant was shut down.

Portales Mayor Sharon King lamented the closure, calling it a "very sad day for our community" and noting that Sunland had been in business for decades.

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