Freirich Foods, a family-owned enterprise established in 1921, recently filed for Chapter 11 bankruptcy protection. This action was taken following a $7 million loss arising from 1.2 million pounds of product that was mishandled by a third-party cold storage company.
The filing will allow the company to restructure finances, maintain solvency and to restore profitability for the benefit of the owners, creditors and indirectly, 100 workers.
In a statement, the CEO noted, “Bankruptcy protection will enable our company to safeguard our business, employees, customers, and partners while we seek to recover our financial loss and propose a plan to restructure debt and renegotiate contracts. We will emerge from this process with a stronger balance sheet”.
It is questioned whether the company can recover the loss through insurance or a lawsuit alleging negligence.