Arkansas Vegetable Canning Company Files for Bankruptcy
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Arkansas Vegetable Canning Company Files for Bankruptcy Protection

November 4, 2013


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Allens Inc., a major canning operation based in Siloam Springs, Arkansas, filed for Chapter 11 bankruptcy last week in an effort to restructure its debt, according to a report from ABC News.

Chapter 11 bankruptcy, which is available for both individuals and businesses, allows filers to restructure their finances so they can reduce their monthly debt payments. In many cases, filers are able to eliminate some of their debt altogether.

According to sources, Allens is looking to sell the remaining portion of its frozen vegetable businesses so it can focus on canned goods, which is a more lucrative portion of its food business.

In its bankruptcy documents, the company claimed to owe at least $100 million in debt to a long list of creditors, according to a report from Arkansas Business. This admission is the first step towards creating a bankruptcy reorganization plan with the aid of the court.

Sources say the company sells vegetables (both canned and frozen) under several different labels, including Allens, Princella, Freshlike, and Royal Prince.

In a statement released this week, the company's president, Josh Allen, said the firm remained "committed to serving our customers and providing consumers with great-tasting, affordable and high-quality vegetables."

In addition, the president expressed appreciation for "the support of our suppliers and the ongoing dedication of our employees, whose hard work is critical to the future of our business."

Indeed, the company’s suppliers, who constitute most of its creditors, are apparently in support of the reorganization, which eliminates a major potential hurdle for the bankruptcy effort.

And the support of creditors bodes well for the 87-year-old company, which is still actively seeking a buyer for its frozen vegetables branch, which includes five massive plants the company purchased in 2006.

The company also expects to be able to repay a significant amount of its debts to creditors, which could speed up the bankruptcy process. It does, however, owe in excess of $100 million to more than 1,000 creditors, so some lenders may leave the process empty-handed.

According to reports, the company hopes to keep most of its 960 employees during the bankruptcy process, and it will continue to operate while it seeks debt relief, which is fairly common for companies that file for Chapter 11 bankruptcy.

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