Jays' creditors want to look at finances
Unsecured creditors of Jays Foods Inc. have asked a bankruptcy judge for permission to investigate ties between the potato chip maker and its parent company, Ubiquity Brands LLC.
In filings Wednesday with the U.S. Bankruptcy Court in Chicago, the official committee of unsecured creditors said it's "prudent" it examines the relationships between Jays, affiliate Select Snacks Inc., and their parent company.
An examination under Bankruptcy Rule 2004 will, the committee said, allow it to decide whether claims exist against Ubiquity, as well as the companies' lender, LaSalle Business Credit LLC.
Chicago-based Jays and Select Snacks filed for Chapter 11 protection on Oct. 11. Rival snack maker Snyder's of Hanover purchased Jays' assets for $24.85 million on Dec. 9.
Rule 2004 allows a bankruptcy court to order a company to turn over documents related to its assets, liabilities and financial affairs.
The creditor committee is seeking information about the cash flow and other business dealings between Jays, Select Snacks and Ubiquity from the year 2006 to the present, and information pertaining to the companies' relationship and business dealings with LaSalle.
The committee said such an investigation is necessary to determine whether the business affairs of Jays and Select Snacks were conducted in a manner that is "fair and equitable" to creditors of the two companies. The probe will also allow it to decide whether Ubiquity ran the companies properly, the committee said.
Bankruptcy Judge Pamela S. Hollis will consider the committee's request at a hearing Thursday.