From Sunland Inc.
Portales, N.M., October 9, 2013 — Sunland, inc. (“Sunland”) today announced that it has voluntarily initiated proceedings under Chapter 7 of the U.S. Bankruptcy Code (“Bankruptcy Code”) in the U.S. Bankruptcy Court for the District of New Mexico (“Bankruptcy Court”). The case docket number is 13-13301-7.
Operations at Sunland’s plant have ceased. In connection with the filing, it is expected that a Chapter 7 trustee (“Trustee”) will be appointed by the Bankruptcy Court. The Trustee will take possession of the company’s property, plant and equipment, and wind up the company’s affairs. All future decision to operate, sell or otherwise liquidate the company’s plant and other assets will be made as part of the bankruptcy proceedings by the Trustee, not by the company or its management.
The filing was precipitated by a series of difficult events over the past year that negatively impacted the company’s finances. Sunland voluntarily recalled all of its products in October 2012, a precautionary measure with enormous financial consequences. Subsequent administrative actions by the Food and Drug Administration and Sunland’s own commitment to re-double its efforts in the areas of food safety and quality control resulted in the prolonged shutdown of the company’s manufacturing facility to allow for necessary renovations to its facility and the implementation of new food safety procedures. In May 2013, Sunland received authorization to resume full operations. Despite resuming operations, ongoing financial and liquidity challenges made it necessary for the company to file for bankruptcy under Chapter 7 of the Bankruptcy Code.