A Saco frozen food distributor plans to reorganize under bankruptcy protection following a dispute with a major supplier.

Sure Winner Foods, which has operated since 1979 and employs more than 250 people, filed a chapter 11 bankruptcy with U.S. Bankruptcy Court in Portland on Tuesday. The company reached an agreement with KeyBank to provide continued financing while it works out details of the reorganization. The agreement will allow Sure Winner to continue to fill orders, pay suppliers and maintain operations, according to a news release from the company.

“The filing for reorganization was necessitated by unilateral acts by a major supplier to the company, which we strongly believe breaches our contract with the supplier,” said Keith Benoit, Sure Winner CEO. “Because of the potential for those acts to be value destructive and to harm our company and all of its stakeholders – including our other vendors, customers, and over 250 valued employees – we had no choice but to take this step. We will seek appropriate action by the court and expect to exit chapter 11 as strong, if not stronger, than we were before this necessary action.”

According to court documents, the company has between one and 49 creditors and owes about $12 million in unsecured claims to the top 20 creditors.

The company said it expects it will pay all creditors quickly. The news release did not identify the supplier alleged to be in breach of its contract with Sure Winner.

About half of the amount owed to the top creditors – nearly $5.8 million – is owed to Nestle Direct Store Delivery, a division of Nestle Waters. The bankruptcy filing says the claim from Nestle is in dispute. No other creditors’ claims are in dispute, according to the filing.

“But for the inexplicable action of our supplier, Sure Winner is solvent and profitable, and has been for some time. We will do everything we can to prevent one counterparty from putting the company into jeopardy,” Benoit said.

In a statement filed with the bankruptcy court, Benoit referred to a distribution contract dispute between Nestle and Sure Winner. A contract between the parties was signed in 2014 and amended in 2019.

“I believe the 2019 agreement to be controlling and fully enforceable, but, on information and belief, expect that (Nestle) may take the position that the 2014 agreement remains in effect and is controlling,” Benoit said in a “declaration” filed with the bankruptcy court.

The contracts were listed as exhibits, but were redacted from the court filing. A call made to Nestle was not immediately returned.

Sure Winner distributes frozen food, ice cream and novelties from more than 40 different manufacturers throughout the Northeast.


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