Lemoore site included in SK Foods' sale

Jun 26, 2009      The Fresno Bee

Tim Sheehan

Jun. 26, 2009 (McClatchy-Tribune Regional News delivered by Newstex) -- Similar stories:

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Creditors file petition for SK Foods Chapter 11

Creditors file petition for SK Foods Chapter 11

Creditors have filed an involuntary Chapter 11 bankruptcy petition against SK Foods, a vegetable grower and processor with two Central Valley plants, and its sister company, RHM Industrial Specialty Foods.

The petition was filed Tuesday in U.S. District Bankruptcy Court in Sacramento on behalf of lenders including Bank of America (NYSE:BAC) , Wells Fargo and (NYSE:WFC) the Bank of Montreal. (TSX:BMO.M) (TSX:BMO.K) (TSX:BMO.J) (TSX:BMO.V) (TSX:BMO.H) (NYSE:BMO) (TSX:BMO)

The company has processing and shipping plants in Williams, 50 miles north of Sacramento, and Lemoore. It sells to manufacturers as well as retail and food-service markets. It is part of SK Foods Group, owner of Salyer American Fresh Foods, SK Frozen Foods and Cedenco Foods Ltd. of New Zealand.

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Firebaugh dehydration plant to reopen

Firebaugh dehydration plant to reopen

A Singapore-based food supplier says it will reopen the former De Francesco dehydrating plant in Firebaugh as soon as this summer, despite the challenge of a drought in the central San Joaquin Valley.

Olam International (OOTC:OLMIY) bought the plant in December and is scheduled to begin dehydrating its first crop of onions on a limited basis by late June or early July, said David Watkins, general manager of the new Key Foods Ingredients plant, a division of the Olam Group.

The prospect of little to no federal water for growers on the west side of the Valley altered Olam's plans, but it did not stop them, Watkins said.

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Partners agree to buy Iowa kosher slaughterhouse

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The president of a Canadian plastics plant and two others filed court documents Tuesday to buy a struggling kosher slaughterhouse in northeast Iowa that was the site of a massive raid by immigration agents last year.

Bankruptcy trustee Joe Sarachek said the move should end months of uncertainty for the plant, Agriprocessors Inc., and the town of Postville. The sale would be subject to the approval of a bankruptcy court. A previous attempt to auction the plant failed three months ago.

"If no one else bids on it and the judge approves the sale, they own Agriprocessors," Sarachek said. "Other buyers are certainly free to come in and bid more."

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Business Briefs: May 22 is deadline to apply for drought grants

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California farmers and ranchers have until May 22 to apply for federal grants for protecting land affected by the drought. The Natural Resources Conservation Service will pay up to 75% of the cost of measures in areas where irrigation has been cut back.

The measures include providing water to livestock, pruning trees to reduce water uptake and planting vegetation to hold soil in place. A total of $3 million is available for the state.

Details: www.ca.nrcs.usda.gov.

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Delphi defends asset sale to private-equity firm

Delphi defends asset sale to private-equity firm

Auto parts maker Delphi Corp. (OOTC:DLPIV) (OOTC:DPHIQ) defended the sale of a portion of its assets to a private equity firm on Thursday, saying it has been open to other buyers since it first entered bankruptcy protection four years ago.

In a Thursday court filing, Delphi Vice President and Chief Financial Officer John Sheehan offered a chronology of Delphi's dealings with Platinum Equity, the Beverly Hills, Calif.-based buyout firm that has agreed to purchase some of Delphi's assets as part of Delphi's plan to exit Chapter 11 bankruptcy protection.

Sheehan's chronology comes in response to an objection filed earlier this week by a group of lenders who have been funding Delphi during its bankruptcy process. The lenders, who are owed more than $3.25 billion, called the proposed sale to Platinum a "secretly negotiated transaction" that violated Delphi's obligations to maximize the value of the lenders' investment.

SK Foods, a vegetable grower and processor with plants in Kings and Colusa counties, was sold out of bankruptcy Thursday to Olam West Coast, a processor headquartered in New York.

The sale was approved by a U.S. District Bankruptcy Court judge in Sacramento, said Bradley Sharp, the bankruptcy trustee for SK Foods.

The $39 million sale includes SK's tomato processing plant in Lemoore and another plant in Williams. According to court documents, the company processed about 1.3 million tons of tomatoes and more than 175 million pounds of tomato paste. The Lemoore plant also produced more than 2.2 million cases of salsa, pasta sauce and diced tomatoes packaged for retail sale.

The Kings Economic Development Corporation said SK Foods employs about 225 people on a year-round basis and nearly 600 seasonal workers. Court records show the entire company has about 400 full-time employees and 2,500 seasonal workers.

SK's creditors filed an involuntary Chapter 11 bankruptcy petition against the company in May, as the company was preparing to file its own petition to seek protection from creditors.

The deal does not include SK's accounts receivable or its existing inventory of product, Sharp said.

Olam West Coast was the only qualified bidder to participate in an auction Wednesday for SK Foods' "physical assets" -- its property, plants and equipment -- Sharp said.

In court documents, Olam vice president of strategic investment Stephen B. Smith said his company had been interested in buying SK Foods since February "in order to expand into the tomato-processing business in California."

The reporter can be reached at tsheehan@fresnobee.com or (559) 441-6319.

Newstex ID: 36055259

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