WILMINGTON, Del. – The bankruptcy trustee of Quantum Foods LLC is suing Springdale, Ark.-based Tyson Foods Inc. to recover $25.7 million. The estate claims the money was a preferential debt repayment. A preferential debt payment is made to certain creditors within 90 days before filing for bankruptcy.

The suit, which was filed March 25 in US Bankruptcy Court, District of Delaware, seeks the return of the money Quantum paid to Tyson Foods and Tyson Fresh Meats, Inc. roughly three months before Quantum declared bankruptcy. Under US bankruptcy law a bankruptcy trustee has the power to undo preferential payments and recover the money to redistribute among other creditors.


Bollingbrook, Ill.-based Quantum Foods filed for bankruptcy in February 2014. The company, a custom manufacturer and processor of value-added protein products, closed for business due to declining demand from the US military for its food products.

Quantum also is fighting a legal battle with Raging Bull Acquisition Company LLC. Raging Bull accused Quantum of breaching an asset purchase agreement, among other charges. Quantum counter-claimed that Raging Bull was engaged in a "fraudulent scheme" to acquire Quantum for less than the agreed upon price of $54 million.

Iowa-based West Liberty Foods LLC bought most of Quantum Foods' assets in June 2014 for $12.7 million.