An independent produce distributor in Spring Hope, N.C., is winding down its operations after filing for bankruptcy this week.
The Triangle Business Journal reports that the company, Bissett Produce Inc., filed for Chapter 11 bankruptcy Monday with $5.5 million in liabilities, including several large disputed debts with suppliers. The company reported $4.4 million in assets and $5.9 million in revenue in 2012, down from $7.3 million in 2011. Spring Hope is a small town about 30 miles east of Raleigh.
The company listed $1.1 million in disputed debts to four suppliers on the bankruptcy petition it filed Monday. One of those, Rock Ridge Farms in Wilson, is pursuing a nonpayment claim with the U.S. Department of Agriculture.
The Journal reports that Bissett bankruptcy attorney Jason Hendren says he doesn’t believe Rock Ridge will prevail in that claim.
While debtor companies sometimes use Chapter 11 to restructure their debts, Hendren says Bissett is using it to maintain a degree of control as it winds down its operations. In contrast to Chapter 11 cases, Chapter 7 cases involve a court-appointed trustee who takes control of a bankruptcy estate.
Hendren says he expects Bissett to repay all of the $2.1 million in secured debt that it owes, mostly to AgCarolina Farm Credit, “with a meaningful distribution to unsecured trade creditors.”
Bissett, a potato and produce distributor, is related to a market that closed several years ago, according to the Journal.