The longtime San Luis Obispo-based wholesale food distribution company filed a request on Wednesday with the U.S. Bankruptcy Court to convert the case to Chapter 7. A Chapter 7 filing usually leads to liquidation of a company.
John Kaney, the owner and chief executive officer of Kaney Foods, had been working to protect the company from creditors while working out a plan to repay its debts under the Chapter 11 plan. However, Kaney said a multitude of factors made it impossible to keep the doors open.
Kaney said the debt load of the company and some failed business ventures led to the companys demise.
Ill admit to all the mistakes and issues, said Kaney. I own them all.
In AMK Foodservices wake, Kaneys father, Patrick Kaney, has opened Coastal Provisions, known as Kaney Meat and Provisions, to take its place. Patrick Kaney was one of the original founders of the company in 1969, which he started with his dad Bill Kaney and brothers Mike, Jim and David.
Patrick Kaney could not be reached for comment.
John Kaney said he has no direct affiliation with the new business other then the familial connection.
A number of employees left the business once Kaney filed for Chapter 11 bankruptcy, he said. Of the remaining 33 employees, at least 20 of those will work for Kaney Meat and Provisions.
We are pleased to let you know that the same quality products and service level you received with AMK Foodservices Inc. will continue to be provided, said Patrick Kaney, in a letter to customers.
The July filing for AMK Foodservices Inc. listed estimated assets of more than $4.1 million and estimated liabilities of $1 million to $10 million. More specific figures were not available.
Kaney purchased AMK for $4.5 million from Scott Travis Lindsey and had operated 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.
Kaney then also obtained a $1 million line of credit from Wells Fargo Bank, bringing the company's monthly debt payments to more than $27,300 a month, court records show.
Kaney Foods was the largest USDA-inspected meat cutting and grinding facility on the Central Coast, serving more than 600 customers a week, according to the company's website.
It sold dry goods, fruits and vegetables, and beef, chicken, pork and seafood to customers, mostly restaurants and independent retail grocery stores in Kern, Monterey, Santa Barbara and San Luis Obispo counties.
That customer base, which has dwindled to about 400, is now being taken over by Kaney Meat and Provisions, which has a USDA meat cutting and grinding facility on Sacramento Drive. That facility was once leased by Kaney Foods as a fish processing plant.
Not much will change for our customers, Kaney said. They will be more successful over there and continue to give restaurants a local business to work with.