James Foods on Monday filed for Chapter 11 bankruptcy protection to restructure debt amid negotiations over ownership of the facility in which it operates.
The Graham, N.C.-based maker of chicken potpies has about 150 creditors, the top 20 of which have nearly $9 million in unsecured claims, according to court documents. Company officials said they racked up debt through a factoring agreement and various lenders while trying to ramp-up production. They also noted cash flow issues caused them to fall behind in payments to the IRS.
The court has scheduled a hearing for Friday on a motion from James to pay its 27 employees as scheduled on that day.