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Cracks Form Between Orval Kent, Egg Supplier
The last supplier to recover goods from food manufacturer Orval Kent Food Co. gets a rotten egg!
Prime Foods Inc., an Indiana-based egg seller, wants Orval Kent to return the nearly $ 60,000 worth of hard-boiled eggs it received in the weeks leading up to Orval Kent’s Chapter 11 bankruptcy case. The timer’s now ticking away against the cooked eggs’ shelf life of only six weeks.
Attorneys representing Prime Foods, which aspires to become the world’s largest hard-boiled egg producer, made their appeal Tuesday to a Delaware bankruptcy judge, filing several pages of invoices that detail thousands of cooked eggs that were shipped to Orval Kent manufacturing plants, where the company cooks its fresh and frozen meals.
Orval Kent, which sells its meals through Wal-Mart, Trader Joe’s and major distributors like Sysco and U.S. Foodservice, made immediate requests in its bankruptcy case to continue paying its produce vendors—a move to keep its supply chain of fresh fruits and veggies intact. The company flash freezes vegetables and assembles its side dishes, deli salads and mixes for sauces and dips at food-preparation plants in Baxter Springs, Kan., Delphos, Ohio and Vista, Calif.
The company spends about $ 26 million on perishable goods each year, according to court documents filed in U.S. Bankruptcy Court in Wilmington, Del.
“Any delays—perceived or real—in satisfying amounts owed to [fresh food vendors] could adversely affect the debtors’ ability to obtain fresh produce, thereby undercutting the debtors’ reorganization and sale prospects,” according to court documents filed by Orval Kent executives, who are moving to sell the company at an auction with a roughly $ 61 million first bid from a group formed by its lender and another competitor.
But Orval Kent’s protective measure didn’t go over easy with Prime Foods.
A federal act allows food suppliers like Prime Foods, a 65-year-old family-owned company based in the American heartland town of Boonville, Ind., to reclaim goods sent to a company that declares bankruptcy several months later.
While specializing in hard-boiled eggs, Prime Foods’ website shows that the company can prepare eggs in more ways than your neighborhood diner. Its website advertises frozen egg whites sold in 30-pound tubs, precooked egg patties that measure 3.25 inches in diameter and liquefied eggs packaged in 6.5-pound boilable pouches.
Rising from humble beginnings, Prime Foods announced earlier this year its plans to expand to become the industry leader in hard-boiled egg selling. The Associated Press said the company plans to spend $ 4 million on an expansion that would enable it to turn out more than 1.1 million eggs per day.
Currently, Prime Foods’ machines can cook and peel 40,000 boiled eggs every hour, according to the Associated Press article, which said the eggs come from chicken farms in northern Indiana, Ohio and Georgia.