Sunland shuttered: NM peanut butter plant involved in a nationwide salmonella outbreak last year closes its doors

In fall, 2012, 41 people in 20 states contracted Salmonella from natural and organic peanut butter, produced by Sunland Inc. of Portales, New Mexico, and primarily through purchases at Trader Joe’s.

By Nov. 2012, Sunland was eager to reopen, but the U.S. Food and Drug Administration had other ideas, and filed a permanent injunction against Sunland.

In May, 2013, Sunland announced it was back in production and company officials said their barf-inducing coveted natural and organic sunland_20120925084929_320_240-300x225butters could be back on store shelves within a month.

But now they’re bankrupt.

Food safety can do that to an operation.

Officials with Sunland Inc., the nation’s largest organic peanut butter processor, said “ongoing financial and liquidity challenges made it necessary for the company to file for bankruptcy under Chapter 7 of the bankruptcy code.”

Chapter 7 means the company shuts down and liquidates its assets. According to the bankruptcy filing, Sunland has an estimated $10 million to $50 million in assets, $50 million to $100 million in liabilities and 1,000 to 5,000 creditors.

Sunland reopened last May, but reportedly took a big financial hit from the eight-month closure and lawsuits that followed the salmonella outbreak.

The company had about 100 employees, who were notified Wednesday that the plant was shut down.

Portales Mayor Sharon King lamented the closure, calling it a “very sad day for our community” and noting that Sunland had been in business for decades.