As Factory Closes, Allens Foods Remains in Bankruptcy

As you know, Del Monte Foods Inc. of San Francisco announced last week that it sold its Sager Creek vegetable business to McCall Farms Inc. of Effingham, South Carolina.

It was Sager Creek Acquisition Corp., of course, that had acquired the assets of Allens Inc. while the Siloam Springs company was in bankruptcy in 2014.

These days, Allens remains in bankruptcy, and its trustee in the Chapter 7 liquidation continues to fight some of the creditors that he accused of scheming to buy the vegetable and food processor out of bankruptcy in order to save themselves millions while leaving most creditors holding an empty bag.

You know the story. In 2016, Allens’ trustee R. Ray Fulmer II blamed more than a dozen entities, including the “turnaround” specialists the creditors insisted Allens hire, in a 47-page adversary complaint in U.S. Bankruptcy Court in Fayetteville. But Fulmer’s didn’t get far.

U.S. Bankruptcy Judge Ben Barry found “there was no fraud on the court or collusion among potential bidders related to the sale,” according to an order he wrote in May.

Fulmer wanted to file an amended complaint against the defendants, but Barry denied that request and warned that Fulmer’s additional alleged facts “would not survive a motion to dismiss.”

Fulmer has an appeal pending with the Bankruptcy Appellate Panel for the 8th U.S. Circuit Court of Appeals.