The 56-year-old broadliner was supposed to have sealed a deal on the sale of certain assets to Columbia, MD, based U.S. Foodservice (USF) last September, marking its exit from distribution. But the company is still sufficiently alive and kicking to have filed for bankruptcy protection, according to The Packer, a produce industry publication. The one-time Kansas City leader is said to owe about $2 million to various creditors and that the bankruptcy filing lists only unsecured debts owed to its 20 largest claimants.
In a complaint filed in an Atlanta federal court in December, USF reportedly said that Lady Baltimore had not delivered what it promised.
"We are essentially taking a 'time-out' to protect our company while we resolve the legal issues and complete the sale to U.S. Foodservice," stated Lady Baltimore's board of directors and officers. "We regret that it came to this, but we believe this is the only way
to break the gridlock and protect our company, employees, stockholders and vendors."