Pure Foods President and CEO John Frostad said the company is seeking a buyer.
In court documents, the company estimated it has more than 100 creditors and noted its estimated liabilities are between $1 million-$10 million.
Pure Foods, in January last year, celebrated the opening of its global headquarters and primary manufacturing location with Tennessee Gov. Bill Haslam and other officials present.
The 88,000-square-foot, state-of-the-art Gateway Commerce Park manufacturing facility was to produce nutrient-dense and reduced-fat snack foods for distribution in Canada, the United States and Mexico.
In a news release, Pure Foods said it had $22 million invested in the grounds, equipment and facility.
Several regional and state organizations collaborated to help secure the location, including the state of Tennessee, city of Kingsport, Kingsport Economic Development Board, NETWORKS — Sullivan Partnership and the Kingsport Chamber of Commerce.
Initial hiring projections were 50-75 employees in the first year working in management, production, and research and development. Over a five-year span, the company expected to hire to up to 275 employees.
Last October, however, Frostad announced a temporary shutdown of operations for Pure Foods to restructure its business.
The Chapter 11 filing, said Frostad, has to be completed so a buyer can purchase the assets of the business.
“We’re coming up on bidders for the business itself,” he explained. “Our hope is it comes out the other side with fully employed (workers) and growing the business the way we intended it. ... It’s very similar to the Heritage Glass thing. ... We have several interested parties. We hope to come to a firm conclusion that first week of March where we are hoping to have final bids.”
Still, Frostad admitted the situation is disappointing.
“There was certainly a lot of effort and time and energy put into that. ... Nobody likes where we ended up, but our hope is growing a business that gainfully employs people in the area like it was intended to do to begin with,” he said.
In a notice sent to customers last fall, Frostad noted the company was founded on the simple principle of developing healthy snack foods for the North American market, and work at two facilities in Bristol, Va., were transitioned to the new Kingsport facility.
“Delays in consolidating production lines in three locations into the new Kingsport facility was not completed until September this year,” Frostad told customers. “We thank you for your patience while the company undertakes this process and have hired a chief restructuring officer to assist us.”
The bankruptcy petition was filed in the U.S. Bankruptcy Court for the Eastern District of Tennessee.