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Allens Inc. Cited by USDA for Unpaid Produce

2 min read

You may have missed this item from The Produce News, a trade magazine that covers the produce industry: Bankrupt Allens Inc. of Siloam Springs has been cited by the U.S. Department of Agriculture for failing to pay for $9.8 million worth of produce.

The report stemmed from a news release last week that said Allens, which is in Chapter 7 liquation, failed to pay 40 produce sellers for 2,300 lots of produce. That is a violation of the Perishable Agricultural Commodities Act, which means Allens can’t operate in the produce industry until Dec. 2, 2017. The news release said that the company’s principals have challenged the finding.

As you know, the former family-owned vegetable processor and food-service provider only exists in bankruptcy court. Sager Creek Vegetable Co. bought Allens’ assets out of bankruptcy in 2014. Then Del Monte Foods Inc. of San Francisco announced it was buying Sager Creek in March.

Allens’ Chapter 7 trustee, R. Ray Fulmer II of Fort Smith, said he hadn’t seen the USDA filing as of Thursday and wasn’t sure what the impact would be on Allens.

“There’s very little money that’s been recovered,” Fulmer said. “There’s been almost none paid out.”

Allens’ bankruptcy dates back to 2013. The claims register summary shows 202 claims have been filed totaling $149.5 million.

Fulmer has a lawsuit pending that is seeking to recover millions from the company’s former officers, Roderick “Rick” Allen, who was chairman of the board, and his sons Josh Allen and Nick Allen, who were the CEO and executive vice president.

The Allens have denied the allegations of wrongdoing in the company’s filings.

“I anticipate that additional litigation could be undertaken,” Fulmer said. “I’m not saying ‘will be’ but we’re still looking at some things.”

He declined to say what he was considering.

Fulmer wants to make sure he’s turned over every vegetable can looking for “every possible course of recovery before we throw our hands up,” he said. “There are a lot of medium to small businesses that went unpaid. And I would really like to see some sort of dividend be available for them.”

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