Information for Creditors of FSPH, Inc. & FoodService Partners, LLC
Jointly Administered Under Case Number 22-10575 in the United States Bankruptcy Court for the District of Delaware
THE DEBTORS’ BUSINESS HISTORY
On June 29th and July 14th, FSPH, Inc., FoodService Partners, LLC, and FoodService Partners Georgia, LLC filed for bankruptcy. As of the Petition Dates, the Debtors had total assets of approximately $9.6 million, comprised of equipment, cash, and cash equivalents. The current liabilities of the Debtors totaled approximately $15 million when they filed for bankruptcy, and increase daily with accrued interest.
The Debtors opened two new facilities in early 2021, at the height of the pandemic. They were unable to show the facilities or attend trade shows to seek new business, yet they had the expense of the new facilities. In May 2022, the Debtors’ largest customer left for a new vendor which added to their cash shortfalls.
CHALLENGES FACING THE COMMITTEE
The Debtor reports it has implemented a new strategy to be in a position to have facilities and products available as the pandemic subsides. The Debtor reports that this strategy is paying off and new contracts were recently signed. The Debtor says there is even more new business in the works. The Debtors are now able to attend trade shows and show off their brands to new customers.
A committee has recently been appointed to advocate for the interests of all unsecured creditors. Obviously, since the Debtors are just now building up to generating cash flows, the major challenge here will be trying to get creditors paid promptly.
HOW CAN THE COMMITTEE IMPROVE OUTCOMES FOR THE UNSECURED CREDITORS?
The Committee is in a position to use their industry knowledge, and with the help of a financial advisor, seek alternative sources of recovery for the unsecured creditors.
As a firm with a lot of bankruptcy experience on both the debtor and creditor sides, PRLT has seen many cases where Committees were able to significantly increase recoveries for unsecured creditors. The fact that the Committee was appointed is a good sign. With experienced counsel and other advisors, the Committee can potentially make a positive impact for creditors in the FSPH and FoodService Products bankruptcy cases.
PRLT does not represent FSPH, Inc. or any of its affiliates. The content on this page is provided for informational purposes only. Nothing on this page or this website creates an attorney/client relationship between you and PRLT. Nothing on this page is legal advice. If you have any questions about the jointly administered FoodService bankruptcy cases or anything discussed on this page, please contact us.