A RiNo food manufacturer has filed for bankruptcy after being sued by multiple employees.
Colorado Food Enterprises, which operates at 3645 Wazee St., filed for Chapter 11 bankruptcy last week. Chapter 11 bankruptcy allows a business to restructure and keep operating while paying creditors over time.
The company, which did not respond to requests for comment, owes $5 million to nearly 400 creditors, according to filings, and listed $774,251 in assets. Owner James Teran signed the filings.
Colorado Food Enterprises said in filings that it filed for bankruptcy in part because it couldn’t secure financing after the employees sued the company and its owner.
Court documents show three former employees sued the business and Teran in July, claiming they never received paid sick leave. Teran responded to the claim in August, denying the allegations.
On Sept. 19, the same plaintiffs filed a lawsuit against Colorado Food Enterprises seeking class-action status on behalf of all hourly employees at the company as of January 2021, again claiming unpaid sick leave.
The food distributor, which said in a filing it has 52 employees, filed for bankruptcy two days later.
According to bankruptcy documents, the 6-year-old company primarily cuts and packages meats and prepares pre-made meals like burritos and sandwiches. It sells to local restaurants and retail stores such as Safeway and Kroger, as well as gas stations.
The filings show revenue dropped this year compared to years past. From January until the Sept. 21 filing date, Colorado Food Enterprises reported $5.18 million in revenue. That compares to $9.7 million reported in 2022 and $14 million in 2021.
Its top creditor listed is Arma Capital LLC with a secured claim of $932,936. The company also owes $80,871 to its landlord for unpaid rent and $75,250 to the owner’s brother, David Teran, for a loan.
Other creditors include food distributor Shamrock Foods Co. (owed $20,417), the Internal Revenue Service for payroll taxes ($911,691) and the Aurora-based packaging supply store Team Packaging Inc. ($39,573).
Over $100,000 of the company’s assets are its food inventory. The filings outlined an extensive supply, including $22,460 worth of 12-ounce boneless chicken breast and $1,495 worth of spicy chorizo crumble.
Aaron A. Garber with Wadsworth Garber Warner Conrardy PC is representing the company in bankruptcy proceedings. He did not respond to requests for comment.