A longtime San Luis Obispo-based wholesale food distribution company sought bankruptcy protection this week.
AMK Foodservices Inc., known as Kaney Foods, filed a Chapter 11 bankruptcy petition July 10 to protect the company from creditors while it works out a plan to repay its debts. It continues to operate.
John Kaney, owner and chief executive officer of Kaney Foods, also filed separately for Chapter 11 bankruptcy protection. In his petition, Kaney lists estimated assets of $500,000 to $1 million and estimated liabilities of $1 million to $10 million.
The filing for AMK Foodservices Inc. lists estimated assets of more than $4.1 million and estimated liabilities of $1 million to $10 million. More specific figures were not available.
Kaney declined to comment Friday afternoon. His Santa Maria and Santa Barbara-based attorneys could not be reached for comment. Kaney Foods is the largest USDA meat cutting and grinding facility on the Central Coast, serving more than 600 customers a week, according to the companys website.
It sells dry goods, fruits and vegetables and beef, chicken, pork and seafood to customers, including primarily restaurants and independent retail grocery stores in Kern, Monterey, Santa Barbara and San Luis Obispo counties.
The company has a long history on the Central Coast. Kaney Meats & Provisions was established in 1969 by Bill Kaney and his sons Mike, Jim, Pat and David, according to the companys website. The company carried the Kaney Foods name until 1989, when it became AMK Foodservices.
Bill Kaneys grandson, John Kaney, purchased AMK for $4.5 million from Scott Travis Lindsey and has been operating the company since Feb. 1, 2007, according to court filings. The purchase price included the assumption of a Coast National Bank note with a balance at the time of about $1 million.
John Kaney then also obtained a $1 million line of credit from Wells Fargo Bank, bringing the companys monthly debt payments to more than $27,300 a month, court records show.
Kaney Foods, with 65 employees in two leased warehouses in San Luis Obispo, generates about $25 million a year in gross sales, records show. The company said it sought bankruptcy protection because its modest profit was inadequate to pay its existing debt and operating expenses.
During Mr. Kaneys tenure at AMK, he has worked to reduce expenses, make AMK more efficient and to increase its sales volume, according to court documents. Mr. Kaney has been successful in those efforts, and AMK has been operating on a modest profit and has bettered its operating results year-to-date over 2011.
The companys assets include more than $4.1 million in accounts receivable (money owed to the company by customers), inventory and equipment.
Court documents list the 20 largest debts owed by AMK Foodservices to local and national companies. They include San Francisco-based AB Foods, a beef production operation, $266,430; Hearst Ranch Beef Division, $78,875; and Los Osos Ranch LLC, $28,115.
J.B. Dewar, a fuel wholesaler in San Luis Obispo, is listed as being owed $28,811 by Kaney on his individual petition. Ken Dewar, president of J.B. Dewar, said hes received timely payments from AMK.
We hope theyre able to continue in business, he said, because theyre a very good account and we enjoy selling them products.