Eighteen months of uncertainty may end this week when the U.S. Bankruptcy Court resumes a hearing to determine whether the highest bidder in an auction staged last week will be awarded the sale of Sunland peanut plant in Portales, New Mexico.

In what some consider a surprising development, Hampton Farms, a North Carolina-based peanut roaster that makes peanut butter in North Carolina and Virginia, made the winning bid of $20 million at an auction to purchase Sunland’s plant and property.

The March 20 auction was ordered in spite of recommendations from Clarke Coll, the court-appointed bankruptcy trustee in the case, that the plant be sold to California-based Ready Roast which had offered to purchase the plant and many of its assets for $18.5 million.

Court officials say they decided in favor of an auction after Hampton Farms expressed last minute interest in bidding for the peanut operation.

Hampton Farms placed the highest bid and was apparently the winner of the sale. But Bankruptcy Court officials called for a special hearing on Friday to review the bids and procedures.

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The hearing was ordered after Bankruptcy Court spokesman Norman Meyer said there had been what he termed further developments, though he failed to elaborate.

Tom Nolan, Hampton Farms vice president of sales and marketing, says depending on the outcome of the hearing, company officials from North Carolina will visit and conduct a walk through to determine the condition of the plant.

Sunland Peanut plant files bankruptcy

Company officials are considering reopening the plant with the intent to produce peanut butter to ship to customers in the western half of the country.

Sunland's problems started some 18 months ago with the recall of organic peanut butter involved in a nationwide Salmonella outbreak. In September of 2012, a salmonella outbreak sickened some 42 people in 20 states and was traced back to peanuts and peanut butter processed and produced at the Portales plant.

Sunland was the first food company to have its registration revoked under the Food Safety Modernization Act, a development that forced the closing of the plant for several weeks following the outbreak. But the plant reopened in 2013 after one of its major creditors and customers, Costco, provided $20 million in new capital to bring the plant into compliance with federal guidelines. But creditors and the local Portales community were surprised when Sunland closed permanently in October last year and shuttered the plant after filing Chapter 7 bankruptcy.

The award of the winning bid last week to Hampton Farms was well received by local officials as well as peanut growers in Eastern New Mexico and West Texas. At the peak of their operation, Sunland employed about 120 people and was the nation's largest producer of Valencia peanuts.

Roosevelt County Chamber of Commerce Director Karl Terry said Friday that while he is uncertain of the plans for the local peanut plant in Portales, the community is hopeful the plant will reopen and again be an important part of the community.

"This sounds like a good deal," he said.

According to the company's website, Hampton Farms is a family operation owned by the Barnes family. The family began farming peanuts nearly a century ago in northeastern North Carolina. It currently operates roasting and production facilities in Severn and Edenton, N.C., Springfield, Mass., and, if the court approves the sale, in Portales, New Mexico.

Sunland’s largest secured creditors include CoBank of Denver, Production Credit Association of Southern New Mexico, and Costco Wholesale. Court officials say they have been in contact with all three creditors who are awaiting the outcome of the hearing.

 

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