Alabama-based produce company files for bankruptcy

Adams Produce Inc., a century-old Birmingham based business, has filed for Chapter 11 bankruptcy.

Adams Produce delivers fresh fruits and vegetables to schools, restaurants and other places throughout the southeast. Their Alabama bankruptcy attorney has requested that the court allow the company to pay employee wages accrued prior to their bankruptcy filing.

The company was established by 1903 by Edwin Calvin Adams but sold to a private equity firm in 2010. Since then, the company has accumulated significant debt, owing close to $10 million to PNC Bank and other creditors.

Currently, Adams produce owes $1.3 million for a real-estate loan, $3.4 million on a revolving credit line, and $750,000 on a term loan.

When a business is saddled with debt, they can hire an expert Alabama bankruptcy lawyer to help them determine which type of bankruptcy structure will work best for their needs. Chapter 11 bankruptcy, gives the business protection from their creditors while they continue to run their companies.

There are, however, companies or individuals that have become so insolvent that they must file for Chapter 13 or Chapter 7 bankruptcy.

Chapter 7 bankruptcy is called liquidation. Under this structure the indebted business or individual hires a Chapter 7 bankruptcy attorney to sell off their assets to pay down debts.

While Chapter 7 and Chapter 11 can be used by business and individuals alike, Chapter 13 is reserved for individuals who find themselves deeply in debt. With this filing, a Chapter 13 bankruptcy lawyer will come up with a debt consolidation plan that must be approved by the individual’s creditors. Generally under Chapter 13 creditors are paid in full.

A debt relief plan can help an entity draft a plan that will make creditors happy and help them return to a better financial state.