NEW YORK (Reuters) – Forward Foods LLC, the maker of Detour energy bars, filed for bankruptcy protection on Tuesday after a tainted peanut recall by its supplier, Peanut Corp of America, forced its own product recall on fears of salmonella poisoning, according to court documents.
Forward Foods, which makes high protein, snack and meal replacement bars primarily under the Detour name, filed for Chapter 11 bankruptcy protection in Delaware, saying that a significant amount of its inventory must be condemned.
The company had voluntarily recalled all Detour bars that contained roasted peanuts from Peanut Corp on January 29 on worries the supplier had distributed peanut products contaminated by salmonella, an organism that can cause serious and sometimes fatal infections in young children and the elderly.
Sales of Detour products containing peanut product from Peanut Corp made up about 75 percent of Forward Foods’ protein bar sales, the company said in documents filed with the U.S. Bankruptcy Court for the District of Delaware.
The company sells its energy bars to health and fitness clubs as well as convenience and grocery stores.
Minden, Nevada-based Forward Foods is primarily owned by private equity firm Emigrant Capital Corp. It employs 52 people and regularly hires an additional 25 temporary workers, according to court documents.
It had both assets and liabilities of between $10 million and $50 million, it said in the filing.
Emigrant has agreed to extend $4 million in debtor-in-possession financing to Forward Foods to help to operate under bankruptcy protection, subject to court approval.
CIT Group/Commercial Services Inc and Next Proteins Inc are among the largest unsecured creditors, according to court documents.
The salmonella outbreak has sickened about 600 people, more than half of them children, and may have killed nine people, and has been traced to a plant in Blakely, Georgia, operated by Peanut Corp.
More than 1,800 products have been recalled since mid-January due to the outbreak, either because they were linked to Peanut Corp or because such links could not be ruled out.
The case is In re Forward Foods LLC, US Bankruptcy Court, District of Delaware, No. 09-10545.
Article Source: Yahoo! News