Banner Year in Arkansas: The Top 10 Business Stories of 2013

by Arkansas Business Staff  on Monday, Dec. 23, 2013 12:00 am  

George Makris Jr. is set to succeed J. Thomas May as CEO of Simmons First National Corp. on Jan. 1, and Wal-Mart announced that Doug McMillon will become CEO of the world’s largest company when its new fiscal year starts Feb. 1.

7. Allens Inc.’s Bankruptcy

On Oct. 28, Allens Inc. of Siloam Springs filed for Chapter 11 bankruptcy with estimated debts of $279.9 million, making it one of the largest bankruptcy cases in the state’s history.

While in reorganization, the 87-year-old family-owned vegetable processor and food-service provider and Seneca Foods Corp. of Marion, N.Y., entered into an asset purchase agreement for Seneca to acquire “substantially all the operating assets” of Allens in a deal worth $148 million.

The agreement calls for Seneca to serve as the “stalking-horse” bidder in an auction process, meaning Seneca has the opportunity to match any other bids Allens might receive. Bankruptcy court still would have to approve Allens’ sale, which is expected to happen in January.

Founded as Allen Canning Co., Allens has about 1,175 employees, with 448 in Arkansas, and has been among Arkansas’ largest private companies ranked by revenue. In addition to the Allens label, the company’s brands include Popeye Spinach, Princella, Freshlike and Royal Prince.

If Allens is sold, unsecured creditors most likely wouldn’t be paid in full. They are owed an estimated $101.9 million, according to an Allens bankruptcy filing by Jonathan Hickman, who is managing director of Alvarez & Marshal Holdings LLC and Allens’ chief restructuring officer.

In its initial bankruptcy filing, Allens estimated its assets at between $100 million and $500 million.

Allens’ financial trouble could be traced to its decision to jump into the frozen-vegetable market in 2006 by purchasing private-label brands from Birds Eye Foods Inc.

The acquisition helped boost Allens’ revenue, which was self-reported to Arkansas Business. Revenue peaked at $746 million in the fiscal year that ended in February 2010, when it had 2,100 employees.

But as Allens struggled to integrate the frozen division into its business, overall sales of canned items in the United Sates were dropping.

In 2011, Allens faced “significant operating challenges” tied to the production of canned vegetables, Allens’ Hickman said in his report.

Allens tried to slash expenses by closing its Fort Worth plant in 2011, which eliminated 70 jobs. Allens then sold most of its frozen foods division in 2012.

 

 

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