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Quantum Foods reaches $1 million settlement on $3 million of claims
By Kali Hays
New York, June 6 – Quantum Foods, LLC asked for court approval of a settlement agreement with Chinese Food Solutions, Inc. (CFS) and Asian Food Solutions, Inc. (ASF) resolving roughly $2.96 million in claims asserted by Quantum, according to a June 5 motion with the U.S. Bankruptcy Court for the District of Delaware.
The claims arose out of a 2010 product supply agreement between Quantum and CFS and AFS that Quantum declared the CFS and AFS parties to be in default of on May 7.
Specifically, Quantum claims that CFS and AFS failed to satisfy a note in the amount of $259,187, to pay past due balances, accounts receivable and amounts and interest from a $1 million promissory note and to meet reimbursement of obligations under a $1.7 million performance bond, according to the motion.
CFS and AFS have disputed the claims and filed counterclaims against Quantum.
Under the agreement, CFS and AFS will pay Quantum a $1 million lump sum within 24 hours of a court order approving the settlement, CFS and AFS will provide proof that a new USDA performance bond equal to or greater than $1.7 million has been obtained within one business day of an approval order, and, as a result, all companies will mutually release claims against one another.
If CFS or AFS fail to comply with anything within the agreement, Quantum may revoke the settlement and pursue further legal action.
A hearing is scheduled for June 26.
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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