Portales City Council this week decided to pursue recovery of $150,000 taxpayers gave Sunland Inc. prior to the peanut processor’s bankruptcy.
It’s the responsible thing to do. And the effort should be an aggressive one.
City Manager Doug Redmond said Sunland officials in May accepted the money — about a month after Sunland began bankruptcy proceedings.
During negotiations, Redmond said he asked Sunland representatives, “Is another shoe going to drop?” He received no indication bankruptcy was being considered.
“They should have notified the city,” Redmond said after learning the sequence of events.
Sunland officials have said they were trying to avoid bankruptcy until an undisclosed event forced their hands on Oct. 7. They only began proceedings in April as a precaution.
Sunland was the largest processor of organic Valencia peanuts in the nation and employed 100 before a salmonella outbreak forced it to shut down in September of 2012. It restarted operations in late December before filing for Chapter 7 bankruptcy 10 months later.
The company had been in business 25 years and was a key component in Roosevelt County’s economy.
This summer, officials expressed confidence it would be again.
“That ought to be the safest peanut butter in the world,” said Wayne Baker, president of the New Mexico Peanut Growers Association and a member of Sunland’s board, after a new sanitation plan was approved.
“Everything is looking much more positive. We’re really hoping that we can get everything going soon.”
By September, products were returning to store shelves.
Sadly, we now know that outward appearance did not reflect the company’s fragile financial foundation.
The reality is one of its customers, Costco, had to front Sunland $20 million to pay farmers for their peanuts.
The Portales taxpayers’ money, officials said, went to address quality control and training issues mandated by the Food and Drug Administration. It was intended “to save jobs here in this community,” LEDA board member Randy Knudson said.
Instead, Sunland is out of business, the jobs are gone and the taxpayers’ money also may be lost.
Private businesses are free to conduct their business any way they choose, and seeking ways to increase cash flow was a logical and just action for Sunland. But seeking, and accepting, taxpayer dollars without alerting those taxpayers’ representatives that bankruptcy was at least an option is simply unethical.
City Council members should be loud and aggressive in convincing the bankruptcy court that Portales’ tax dollars should be atop the list to be paid when Sunland’s assets are distributed.
Unsigned editorials are the opinion of the Clovis Media Inc. editorial board, which includes Publisher Ray Sullivan and Editor David Stevens.