ALBUQUERQUE (AP) — A federal bankruptcy judge on Tuesday ordered a new auction for an eastern New Mexico peanut butter plant involved in a 2012 salmonella outbreak.
The trustee overseeing the liquidation of the now defunct Sunland Inc. in Portales had asked to be able to consider a $25 million cash offer that came in after last week’s bidding for the plant.
The offer from Canada’s Golden Boy Foods is 25 percent higher than the $20 million bid Thursday from a North Carolina company, Hampton Farms, which beat out Ready Roast Nut Co. of California.
Trustee Clarke Coll in a hearing Monday said the higher offer could determine whether unsecured creditors will get any payments from Sunland. The company filed for bankruptcy last year following a salmonella outbreak that prompted a nationwide recall and shuttered its operations for eight months.
Attorneys for North Carolina-based Hampton Farms, argued that Golden Boy came to the table too late, and that to invalidate an auction where proper procedures had been followed would jeopardize the integrity of the system.
U.S. Bankruptcy Judge David Thuma in Albuquerque set the new bidding for 10 a.m. Wednesday.
He invited all three companies to participate, and set the opening bid for $25 million.
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.