Posted 7/15/2013 12:00 am
It seems almost like ancient history, the collapse of Affiliated Foods Southwest and its related entities back in May 2009.
But in U.S. Bankruptcy Court in Little Rock, the cleanup continues.
At a hearing scheduled for Wednesday, Bankruptcy Judge Richard D. Taylor will hear a proposed settlement in which former directors will offer to pay $7.5 million to settle bankruptcy trustee claims that they negligently allowed top executives to mismanage the wholesale grocery cooperative into the ground.
Specifically, they’ll offer $3.2 million to Affiliated Foods’ trustee, Richard L. Cox of Hot Springs; $3.2 million to Shur Valu’s trustee, Randy Rice of Little Rock; and $1.1 million to a class of former cooperative members who lost millions because they let Affiliated hold onto their share of annual profits in the form of interest-bearing “certificates of indebtedness.”
As Whispers reported back in April, financial experts had previously recovered about $3.6 million in other moneys for Affiliated’s creditors, mainly from vendors who were paid shortly before the bankruptcy filing while other vendors were stiffed.
Affiliated Foods’ two top executives, CEO John Mills and CFO Lex Martinez, have both completed federal prison sentences for their roles in the company’s downfall.