Good News for Affiliated Foods Creditors as Claims Shrink

by Arkansas Business Staff  on Monday, Apr. 29, 2013 12:00 am  

The total amount financial experts helped recover for creditors of the defunct Affiliated Foods Southwest Inc. of Little Rock now stands at about $3.6 million.

Plus, the work from the team at Lain Faulkner & Co. of Dallas, which offers bankruptcy, accounting and administrative services, led to vendors agreeing to waive $1.07 million worth of claims against Affiliated.

That’s according to a recent Bankruptcy Court filing from Trustee Richard Cox of Hot Springs.

The money collected through April 17 came from Affiliated vendors who were paid within 90 days before Affiliated filed for bankruptcy back in 2009. Affiliated has been in bankruptcy since then. Bankruptcy law forbids making preferential payments to some vendors while stiffing others.

Still, more good news might be on the way for the creditors. About 65 cases are “in progress and are expected to yield substantial additional cash benefit to the” creditors, Cox said in the filing.

Cox asked the bankruptcy court to approve Lain Faulkner’s bill of $79,095 for the work it did between September and February. Lain Faulkner also billed the court $170,882 for its work done between March and August 2012.

By all accounts, Affiliated Foods’ books were a mess. It reported $47.6 million in assets and $101.5 million in debt — $62.5 million of it unsecured.

The fallout from the company’s collapse included prison sentences for former CEO John Mills and former CFO Alexander “Lex” Martinez.

Both have completed their prison terms.



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