Quantum Foods asset purchaser seeks return of $5.4 million deposit

By Kali Hays

New York, May 12 - Quantum Foods, LLC's stalking horse bidder, Raging Bull Acquisitions, LLC, is accusing the company of breaching the asset purchase agreement by refusing to reimburse a required $5.4 million deposit Raging Bull provided as part of its $55 million bid for substantially all company assets, according to a Monday complaint with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, Raging Bull was the sole bidder for the company's assets as of the April 16 bid deadline.

Under the approved bid procedures and related asset purchase agreement, all qualified bidders were required to provide a good faith deposit equaling 10% of the purchase price.

Raging Bull is also accusing Quantum of further violations of agreed closing conditions by misrepresenting primary assets, failing to preserve customer contracts and relationships, company founder Edward Bleka attempting to establish a competing business, an inability to transfer usage rights of wastewater facilities and failing to disclose an ongoing investigation by the Equal Employment Opportunity Commission involving $5 million in fees and penalties, according to the complaint.

Based on these claims, and the fact that a sale order that was required by April 30 has not been entered, Raging Bull asked that the court order the return of the deposit in full.

Quantum Foods, an Illinois-based provider of cooked beef, poultry and pork for school, military and retail outlets, filed for bankruptcy Feb. 18 under the Chapter 11 case number 14-10318.

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