Birmingham, Ala.-based distributor Adams Produce Co. LLC has filed for bankruptcy and owes fruit and vegetable suppliers $10.2 million.
Half of that is owed to foodservice distributor Pro*Act, Monterey, Calif.
Adams, which filed for Chapter 11 bankruptcy on April 27 in U.S. Bankruptcy Court in Birmingham, has closed and a company official does not know when or if it will reopen.
All of the company’s 400 employees have been laid off because the company had not, as of May 3, received authorization from the court to pay employees wages and benefits, said Thomas O’Donoghue, the company’s chief restructuring officer.
But four of Adams’ nine distribution centers had reopened under new names and ownership as of May 3, and about half of the company’s employees have been rehired, O’Donoghue said.
That was made possible after the judge in the case allowed former Adams managers and owners of the distribution centers the company leased to buy Adams’ produce inventory and sell it out of the facilities, O’Donoghue said.
Two of the reopenend facilities are in Florida, one in Mississippi and one in Arkansas.
As of May 3, O’Donoghue said he did not know whether Adams would eventually reopen for business or whether the company’s other five distribution centers would reopen.
In addition to the $10.2 million owed to produce shippers, Adams owes $4.4 million to other creditors.
In its filing, Adams, which was founded in 1903, said it had more than 200 but fewer than 1,000 creditors; assets ranging from $10 million to $50 million; and liabilities from $10 million to $50 million.
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