Coated veggies don’t fit act, ruling says

A bankruptcy judge ruled Monday in favor of the former owners of Allens Inc., agreeing that an Idaho-based company can’t claim special protections for a $97,773 bill for appetizers.

Great American Appetizers argued its batter-coated jalapeno peppers, pickles, corn and fried green tomatoes were perishable agricultural commodities and due protection under the Perishable Agricultural Commodities Act. Valid claims made under the act typically are given precedence in bankruptcy cases and paid dollar for dollar.

Bankruptcy Judge Ben Barry found that such protection extends to “fresh” fruit and vegetables only and while “fresh” is not defined, it generally restricts protection to unprocessed or minimally processed food. The claim now is regulated to a general, unsecured bill.

To date, Barry has overruled the majority of objections made by Veg Liquidation, the former owners of defunct Allens, to claims under the act. The three largest claims total about $12 million, excluding attorneys’ fees and interest. Barry’s rulings have been appealed to the U.S. District Court of the Western District of Arkansas.

In October 2013, Siloam Springs-based Allens Inc. filed for Chapter 11 protection. It has since been shifted to Chapter 7. In February, the company was bought at auction. It was renamed Sager Creek Vegetable Co. in July.