Creditors of bankrupt Le-Nature’s Inc. are seeking to liquidate the assets of the maker of bottled waters, teas, juices, and nutritional drinks, reported the Associated Press.
Le-Nature’s filed for Chapter 11 protection last year, according to the AP, after a judge determined that founder and chief executive officer Gregory J. Podlucky and other directors may have engaged in criminal conduct by misreporting financial information.
Last August, Podlucky received a $1.2 billion offer for the company but refused to permit the potential buyer to review financial records, according to the Pittsburgh Tribune Review, which cited a lawsuit filed in federal court by Star Associates of Kansas City.
The company’s 2005 financial statements reported revenues of $275 million, but according to the AP, which cited court documents filed last month, the actual amount may have been as low as $32 million. The wire service also noted that as of late last year, the company had more than $278 million in bank debt, about $150 million in bond debt, $300 million in capital lease obligations, and various other liabilities.
The creditors group has filed a plan that would convert the bankruptcy from a Chapter 11 reorganization to a Chapter 7 liquidation, according to the AP. A hearing is scheduled for Tuesday before U.S. Bankruptcy Judge M. Bruce McCullough.
An asset sale would generate as much as $40 million, reported the wire service. The creditors also seek to replace bankruptcy trustee R. Todd Nielson with an individual who would have broader powers to sell the company’s assets and sue its former executives, according to the report.