Sunland closes operations — files bankruptcy

PNT senior writer

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For Terri Lancaster, it started like any other work day at Sunland Inc., a place she said felt like home.

Her world was shaken Wednesday morning when she was called into a company-wide meeting and told Sunland’s plants were closing.

link CMI staff photo: Tony Bullocks

Sunland, Inc.was the nation’s largest organic peanut butter processor.

“It’s just a heartbreak. There was quite a bit of crying because we’re a lot like family,” said Lancaster, 47, who started at Sunland in the packaging room nine years ago and worked her way up to an assistant manager position.

She described herself as being in a state of disbelief because she had no clue the closure was coming.

“We worked really hard to make a comeback and thought we were (continually) headed that way,” Lancaster said.

Citing the impact of a voluntary product recall and a government enforced plant shutdown last year, the Portales peanut processor filed for Chapter 7 bankruptcy Wednesday, according to a company press release.

Lancaster was one of the more than 100 employees laid off. Sunland President and CEO Jimmie Shearer declined comment Wednesday afternoon.

Chapter 7 means the company shuts down and liquidates its assets.

Sunland, a major employer in Roosevelt County where the Valencia peanut is king, was linked to a salmonella outbreak in September 2012 that caused 41 illnesses in 20 states.

Sunland recalled more than 100 nut and peanut butter products after the outbreak.

It reopened production of its peanut butter plant in March.

“Sunland voluntarily recalled all of its products in October 2012, a precautionary measure with enormous financial consequences,” Wednesday’s press release said.

“Subsequent administrative actions by the Food and Drug Administration and Sunland’s own commitment to re-double its efforts in the areas of food safety and quality control resulted in the prolonged shutdown of the company’s manufacturing facility to allow for necessary renovations to its facility and the implementation of new food safety procedures.”

In May, Sunland received authorization to resume full operations, but “ongoing financial and liquidity challenges made it necessary for the company to file for bankruptcy under Chapter 7 of the Bankruptcy Code,” the press release said.

According to the bankruptcy filing, Sunland has an estimated $10 million to $50 million in assets, $50 million to $100 million in liabilities and 1,000 to 5,000 creditors.

Sunland board member and peanut producer Wayne Baker said the FDA required more than the company could afford to do.

“It’s a very unfair deal,” Baker said. “It’s a sad day for Portales, for the community and for peanut growers.”

Baker said the 25-year-old company just couldn’t recover from the recall.

“It was just kind of sudden. We thought we could pull it together but it was a steeper mountain to climb. We tried to meet the FDA requirements. There was no end,” Baker said. “We were a great company. We’re proud of what we did and proud of what we accomplished.”

Justin Shipley, 29, said he had to take a drive after he left the company’s grounds to contemplate his next move as the sole provider for his wife and six children.

The grinder operator was with the company for three years and was putting together equipment to prepare for the peanut harvest when he was let go.

“It was just all of a sudden. They told us that no other company has had a big a recall as we had, and came back from it,” Shipley said. “I just put my head down and shook it. I got a family. I got kids to take care of.”

Shipley said all he can do now is look for another job.

“Even if I don’t have a skill set a job is looking for, I’m always willing to learn. I’m a hard worker,” Shipley said. “If I don’t know it, I’ll learn it.”