Bankruptcy Trustee Seeks $25.7 Million From Tyson Foods
by March 28, 2015 9:41 am 290 views
The bankruptcy trustee of Quantum Foods, a former Tyson Foods customer, is suing the Springdale-based meat company to recover $25.7 million.
The trustee claims the money was a preferential debt repayment made to certain creditors within 90 days before filing for bankruptcy.
The suit, which was filed March 25 in US Bankruptcy Court, District of Delaware, seeks the return of the money Quantum paid to Tyson Foods and Tyson Fresh Meats, Inc. roughly three months before Quantum declared bankruptcy.
Under U.S.bankruptcy law, a bankruptcy trustee has the power to undo preferential payments and recover the money to redistribute among other creditors.
Quantum Foods filed for bankruptcy in February 2014 after its food processing business sales to U.S. military declined.
Iowa-based West Liberty Foods LLC bought most of Quantum Foods’ assets in June 2014 for $12.7 million.
“Quantum was a customer of ours before it filed for bankruptcy. It’s fairly common in bankruptcy cases for attorneys representing the unsecured creditors’ committee to try and recover payments made to other companies that supply product. We have numerous defenses against these claims under bankruptcy law and intend to vigorously defend this complaint,” said Tyson Foods spokesman Worth Sparkman.