YAKIMA -- Amid a pile of debt and safety concerns over its products, Yakima-based Snokist Growers filed for bankruptcy Wednesday, leaving the fate of the food-processing operation and hundreds of seasonal employees in the air.
The 108-year-old company cited orders lost in the wake of a critical federal Food and Drug Administration report and inflexibility on the part of its lender.
Snokist employs more than 600 mostly seasonal workers in its food processing plant in Terrace Heights and several warehouses across the Yakima Valley.
The cooperative is owned by more than 150 growers who bring in their apples, pears, cherries and plums to be canned or turned into fruit cups, purees and juices.
Because apple and pear production is ending for the season, many employees were already in line to be laid off, said Tina Moss, the company's local public relations representative from Enigma Marketing.
Depending on how the company is restructured under the Chapter 11 bankruptcy filing, some warehouse and shipping employees will stay on to move inventory for the next 12 to 18 months. The number of administrative jobs also will shrink, as those duties are no longer needed, Moss said.
But at this time, she said, there's no way of knowing how many will stay. She said Snokist plans to have some resolution in place in time for cherry season in early June.
The company's financial woes include a debt of almost $73.4 million to more than 2,000 creditors; its total assets are $69.6 million, according to bankruptcy documents filed in U.S. Bankruptcy Court.
The company's biggest creditors include agricultural lender Rabo AgriFinance at $26.5 million; Community Bank, which is owed $9.5 million for a loan taken out against its Terrace Heights cannery; and Key Bank, owed $1.3 million for a loan taken out against a fruit warehouse in Sawyer.
It also owes more than $315,000 in wages and benefits to employees.
The bankruptcy culminates a series of setbacks for the company, which was founded in 1903 and was once a powerhouse in the Yakima Valley.
As recently as 2002, Snokist employed up to 1,000 people at the peak of harvest season and worked with several hundred growers. But during the past decade, the company has cut employees and benefits and struggled with a massive strike, falling revenue and, most recently, the contamination complaints from the FDA that scared off customers and reduced sales.
This spring, Snokist voluntarily recalled 3,300 cases of gallon-size cans of applesauce, with six cans in each case, after the food was linked to temporary upset stomachs among nine schoolchildren in North Carolina.
Snokist said it determined that a malfunction of the applesauce cans could have caused spoilage and exterior damage. However, company officials at the time stressed that the FDA never established that the applesauce caused the illnesses.
The recall was followed by an in-depth investigation by the FDA, which said it found nine major food safety violations, including dozens of instances of mold in containers of applesauce and puree that was later reprocessed for consumption.
The FDA also cited leaky fruit containers, fruit flies, bird feathers, and a lack of hand washing sites at the plant.