'Pink Slime' Controversy And Bankruptcy

: Chris Lee Law Firm

  Filed under: Chapter 11

AFA FoodsThe manufacturers of the controversial beef product being dubbed as “pink slime” have a lot going on these days. AFA Foods Inc. filed for Chapter 11 bankruptcy earlier this week as the media bashing has created an even bigger beating to the company’s profits. Now dealing with debt resolution and reputation repair, AFA Foods  is in the midst of what some are referring to as a horrible coincidence in timing.

Times Are Tough

As one of the largest beef product manufacturers in the United States, it seems a bit odd that AFA Foods would have been suffering from profitability problems over the last few years. Despite carrying contracts with major food retailers and restaurants such as Wal-Mart, Safeway, McDonalds and Burger King, the company has listed debt liabilities close to $198 million. The future of their profitability is up in the air as the storm over “pink slime” continues.

Now that public outcry over eliminating the use of the controversial additive has gotten stronger, nearly all major contract holders have ordered AFA Foods to stop the use of the product until further notice. With so many people refusing products that contain the additive AFA Foods faces many challenges ahead to retain profitability with or without the additive, as well as rebuild their reputation as a quality beef product manufacturer.


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