Jump to Navigation

New Jersey meat vendor faces commercial bankruptcy

Recent news reports have brought "pink slime" to the attention of New Jersey consumers. When negative reports surface about a company, it can hurt its financial stability. On April 2, AFA Foods, a ground beef processor that distributes to retailers and fast-food markets in New Jersey said it was filing for Chapter 11 bankruptcy, seeking commercial bankruptcy protection while liquidating its assets.

Its bankruptcy was precipitated by a marked drop in business after negative media reports about an ammonia-treated meat filler, known as "pink-slime." The company says it never relied on the boneless lean meat trimmings in question, but only used it according to the specifications of its customers. Company officials said the recent news reports and public issues over the meat filler have reduced industry-wide ground beef demand.

The company began selling its assets to keep its business alive in light of the "pink slime" news reports. It procured a loan for $56 million to bankroll its operations and keep selling products to its customers while the bankruptcy is pending. Three state governors have commented about the news reports and the meat processing companies, saying the media is overplaying the issue. Others have said "pink slime" is nothing more than a federal government scientist sharing his own personal opinion because he is personally offended by the product.

Consumer demand for beef products dropped off so much that the company needed the protection of the bankruptcy courts. By deciding to liquidate its assets through bankruptcy, the company has taken steps to protect itself from constant creditor demands while closing its business under an orderly, court-supervised commercial bankruptcy process. Businesses in New Jersey suffering from similar economic woes may also benefit from considering a similar approach to solve its financial problems and plan for a new beginning.

Source: New Jersey Herald, "AFA Foods files for Ch. 11, citing 'pink slime'," Candice Choi, April 2, 2012

No Comments

Leave a comment
Comment Information

Contact Us

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close
Subscribe to This Blog's Feed Visit Our
Bankruptcy Law Website

Office Location

Law Office of Robert Braverman, LLC

South Jersey
1060 North Kings Highway, Suite 333
Cherry Hill, NJ 08034
Phone: 856-254-2196 
Toll Free: 800-759-0767
Fax: 856-414-1230
Map & Directions

Willingboro Area Office
Law Office of Robert Braverman, LLC

1848 Burlington Mount Holly Rd (Route 541)
Mount Holly, NJ 08060
Phone: 856-254-2196
Toll Free: 800-759-0767
Willingboro Area Office

Center City, Philadelphia
15th Floor
1515 Market Street
Philadelphia, PA 19102
Map & Directions

Northeast Philadelphia
7909 Bustleton Avenue
Philadelphia, PA 19152
Map & Directions

FindLaw Network