LEHI -- Lehi Roller Mills representatives filed for bankruptcy protection in Salt Lake City with the United States Bankruptcy Court on Dec. 6.
"Lehi Roller Mills intends to continue its regular operations and the selling of its products through the reorganization process," said Jeffrey Cardon of Hill, Johnson & Schmutz, LC.
The move comes after some serious financial trouble for the mill. The property was set to be sold in a foreclosure auction last month but the company was instead able to file for bankruptcy protection. Earlier this year the Labor Department filed a lawsuit against the company for failing to pay its employees; that suit was dropped when Lehi Roller Mills paid its workers.
The company's shortfalls began during the economic collapse in 2009 when Roller Mills accounts in three banks were frozen because the federal government took control of the banks. Then a line of credit that had been extended was withdrawn. Lehi Roller Mills owner Sherm Robinson has said the line of credit was meant to prevent budget shortages between incoming and outgoing revenue.
With the Chapter 11 filing, the historic hometown mill on Lehi's Main and 850 East streets will be able to remain in business selling brownie and blueberry pancake mixes as well as its main product line of Turkey Red flour at its country store, and has been able to continue serving its business clients.
The legal move is intended to provide the mill with an opportunity to reorganize its finances and create a stronger future while protecting the company from its more aggressive debtors. Not a Chapter 7, which would liquidate all the business's assets to pay its debtors, the more difficult process of a Chapter 11 will take time. Cardon said he could not give a timeline for how long the process will take at this point.
"We have a ton of paperwork to go through," said Rick Brown, Lehi Roller Mills spokesman. "The Chapter 11 allows investors to come to the table, it allows them to rearrange their finances. We are looking forward with a more substantially sound foundation."
Brown said everything will be put back in order giving time for the business owners to get back on their feet and look to the future.
"Essentially it is business as usual," Brown said. "I think you will see quite an improvement."
According to business_bankruptcy.com, 70 percent of all businesses filing bankruptcy in 2011 filed a Chapter 7. Choosing a Chapter 7 usually means a company's employees will be laid off and the company ceases to exist. A Chapter 11 allows a business more time to repay its debts. Robinson's business has been in his family for three generations, since 1906, and he hand picks the wheat for the mill. The family's fourth generation also works at the mill.
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