From Hot Sauce to Hot Water, Southern Files for Bankruptcy
by June 28, 1999 12:00 am 139 views
Two weeks after Arkansas National Bank foreclosed on its loan and a week after six investors filed suit against Southern Signature Inc. of Rogers, the sauce company filed for Chapter 11 bankruptcy protection.
Chapter 11 frees a company from the threat of creditor’s lawsuits while finances are being reorganized.
A skeleton bankruptcy petition was filed June 9 in U.S. District Court in Fayetteville along with a motion to use cash collateral to pay $188,927 for back salaries, taxes and to keep operating the business. Arkansas National Bank has a lien on Southern Signature’s accounts receivable, and the company wants that money to continue its manufacturing operation.
A week earlier, six investors filed suit in Benton County Circuit Court against the company, its CEO, a former president and a secretary claiming they didn’t tell potential investors that Southern Signature was $600,000 in debt.
The suit also claims president Lawrence Mathis, CEO Steve Sommer and secretary Tiffany Hatch had sold stock in Southern Signature although the company wasn’t registered with the Arkansas Securities Department.
On May 25, Arkansas National Bank filed suit in Benton County Chancery Court to foreclose on the mortgage on Southern Signature’s building at 2301 S. Eighth St. after the company missed several monthly payments. The suit says Southern Signature owes the bank $875,000 plus 11 percent interest.
Also, on Dec. 31, Southern Signature had its charter revoked by the Arkansas Secretary of State’s office for not paying last year’s corporation franchise tax.
Sommer couldn’t be reached for comment.
Southern Signature makes custom sauces and dressings that are labeled and used by some Northwest Arkansas restaurants, including AQ Chicken House and Fat Toney’s Bar-B-Que.