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Harim USA Looks Set to Acquire Allen's Assets

by 5m Editor
27 July 2011, at 9:40am

DELAWARE, US - Harim USA is the highest bidder for the assets of bankrupt Allen Family Foods; court approval is required for the acquisition.

An affiliate of a South Korean poultry firm was the winning bidder in a bankruptcy auction for the assets of Allen Family Foods, a Delaware company that employs hundreds on Maryland's Eastern Shore, according to Baltimore Sun.

Richard A. Robinson, an attorney representing Harim USA Ltd., the Delaware arm of Harim Holdings Co. Ltd., said the company submitted the highest bid for what amounted to nearly all of Allen's assets. The auction on 25 July lasted about 12 hours, he said.

The acquisition is contingent on approval from a bankruptcy judge. Mr Robinson said his client's bid amount would be made public in a court hearing today in Wilmington, Delaware.

"We expect the bankruptcy court to approve the sale tomorrow," Mr Robinson said on 26 July.

Allen filed for bankruptcy protection in June with a purchase agreement in hand from competitor Mountaire Farms that served as the initial bid. But Mountaire announced on 26 July that it had 'discontinued' its efforts to purchase almost all of Allen's assets.

Mountaire's bid going into the auction was for $30 million, with an additional amount for inventory of up to $38 million, according to bankruptcy filings. A bankruptcy court trustee, objecting in June to proposed break-up fees, put the likely purchase price at $53 million.

Mountaire, which like Allen is based in Delaware, said yesterday that it would move forward with its plan to expand operations and add employees – just not by acquiring facilities owned by Allen.

Allen's chief executive, Bob Turley, said Harim representatives indicated they would use all the facilities they are poised to acquire, rather than shutting some down.

"They told me they want to keep the total company running," Mr Turley said.

Allen employs more than 400 people at a processing plant in Talbot County and about 70 at a Dorchester County rendering plant. It also has contracts with dozens of farmers on Maryland's Eastern Shore, according to Baltimore Sun. The company blamed its financial woes on economic conditions, particularly the rapid rise in the price of chicken feed.