ALBUQUERQUE, N.M. (AP) — Nearly a million jars of peanut butter are being dumped at a New Mexico landfill to expedite the sale of a bankrupt peanut-processing plant that was at the heart of a 2012 salmonella outbreak and nationwide recall. 
 
 Bankruptcy trustee Clarke Coll said he had no other choice after Costco Wholesale refused to take shipment of the Sunland Inc. product and declined requests to let it be donated to food banks or repackaged or sold to brokers who provide food to institutions like prisons. 
 
 "We considered all options," Coll said. "They didn't agree." 
 
 Costco officials did not return telephone calls seeking comment. But court filings indicate the product was made with $2.8 million worth of Valencia peanuts owned by Costco and had been sitting in the warehouse since the company shut down and filed for bankruptcy last fall. 
 
 After extensive testing, Costco agreed to a court order authorizing the trustee to sell it the peanut butter. But after getting eight loads, Costco rejected it as "not merchantable" because of leaky peanut oil. 
 
 Coll said "all parties agreed there's nothing wrong with the peanut butter from a health and safety issue," but court records show that on a March 19 conference call Costco said "it would not agree to any disposition ... other than destruction." 
 
 So instead of selling or donating the peanut butter, with a value estimated at $2.6 million, the estate is paying about $60,000 to haul the 950,000 jars of nut butter — or about 25 tons — to the Curry County landfill in Clovis, where public works director Clint Bunch says it "will go in with our regular waste and covered with dirt." 
 
 The last of 58 truckloads was expected Friday, he said. 
 
 Sunland made peanut butter under a number of different labels for retailers like Costco, Kroger and Trader Joe's, along with products under its own name. But the plant was shut down in September 2012 after its products were linked to 41 salmonella cases in 20 states. 
 
 It later reopened for about five months, but shut down last October after the company's Chapter 7 bankruptcy filing. 
 
 Sunland processed Valencia peanuts, a sweet variety of peanut that is unique to the region and preferred for natural butters because it is flavorful without additives. 
 
 Sonya Warwick, spokeswoman for New Mexico's largest food bank, declined to comment directly on the situation, but she noted that rescued food accounted for 74 percent of what Roadrunner Food Bank distributed across New Mexico last year. 
 
 "Our fleet picks up rescued food from hundreds of locations weekly and brings it back to the food bank," she said. "Before distributing it, volunteers help label, sort or repack it for distribution to partner agencies across the state. 
 
 "Access to rescued food allows us to provide a more well-rounded and balanced meal to New Mexicans experiencing hunger." ||||| ........................................................................................................................................................................................ 
 
 A Canadian company’s last-minute offer to buy a shuttered Portales peanut butter factory for $25 million has been deemed to good to ignore. 
 
 A bankruptcy court judge Tuesday ordered that bidding for Sunland Inc.’s assets be reopened, thus accommodating Golden Boy Foods’ late-to-the-game offer to pay $25 million — $5 million more than the high bidder at an auction last week. 
 
 The auction will continue at 10 a.m. today in U.S. Bankruptcy Court in Albuquerque. Golden Boy’s $25 million offer will serve as the opening bid. 
 
 Judge David Thuma will consider final approval of the winning bid in a separate hearing set for 1 p.m. 
 
 Thuma’s ruling to reopen bidding comes after several dramatic days in Sunland’s Chapter 7 bankruptcy case. North Carolina-based peanut processor Hampton Farms had outbid Calif.-based Ready Roast Nut Co. in a courtroom auction last Thursday with its price of $20.05 million. They were the sole bidders. 
 
 But just minutes before the sale was to go before Thuma last Friday for final approval, a representative from Golden Boy Foods called trustee Clarke Coll with the $25 million offer. The British Columbia company wired the $25 million to a title company Monday. 
 
 Both Hampton Farms and Golden Boy say they would resume manufacturing operations at the Portales plant. 
 
 Coll and his attorney in the matter, Thomas Walker, say the additional $5 million offered by Golden Boy would help settle more of Sunland’s debt. Coll said Sunland has about $21 million in secured debt, plus another $2.5 million in administrative claims and an estimated $40 million in unsecured claims. 
 
 Walker said Tuesday that the judge’s decision to reopen bidding will benefit the creditors. 
 
 “The farmers, the people who are owed money by this bankrupt company are going to benefit because of this,” he said. 
 
 Hampton Farms’ attorney did not return a Journal message Tuesday. But the company’s lawyers argued in a Monday hearing that the judge should honor Thursday’s auction results and that anything less would create uncertainty and deter bidding in future bankruptcy cases. 
 
 As part of his Tuesday ruling, Thuma wrote that he was “loath to disturb the results of a judicial auction,” but that he couldn’t ignore the extra $5 million at stake. 
 
 “Given Golden Boy’s $25 million upset bid, the Court cannot make a finding that the sale to Hampton (for $20,050,000) is in the best interests of the estate,” Thuma wrote. 
 
 Golden Boy’s bid may have arrived late to the auction, but its interest in the Sunland plant was not new. 
 
 Paul Henderson, president of the company’s nut butter division, said in court Monday that Golden Boy had contacted Coll last November and even sent representatives to tour the Sunland facility. 
 
 But Golden Boy was in the process of being sold, and its parent company didn’t want to complicate that deal with the acquisition of Sunland’s assets, he said. Henderson told Coll that Golden Boy was withdrawing as a possible buyer. 
 
 Golden Boy’s sale to Post Holdings was finalized Feb. 1. Henderson said he incorrectly believed that Sunland had been bought but learned on March 18 that, in fact, an auction was set for March 20. He said he and his boss scrambled to get corporate approval from Post to make an offer. 
 
 Once they did, Henderson tried to reach Coll at his Roswell office Friday morning but only could leave a message. He ultimately tracked Coll down that afternoon with a phone call to the Albuquerque courthouse. 
 
 Coll said he received Henderson’s call about 10 minutes before the hearing to approve the sale to Hampton Farms. 
 
 “You can’t make this stuff up,” Coll testified Monday. “Life’s stranger than fiction. He offered me $25 million. I thought it was a joke.” 
 
 Sunland filed for bankruptcy in 2013, a year after it was linked to a salmonella outbreak. Located in Valencia peanut growing country, Sunland had been the nation’s largest producer of organic peanut butter and had made products for retailers such as Trader Joe’s, Costco and Target. 
 
 Sunland recalled hundreds of products in the wake of the outbreak and had its plant shut down for several months by federal regulators. 
 
 The company resumed peanut butter production last May but cited “ongoing financial and liquidity challenges” when filing for Chapter 7 bankruptcy liquidation last October. 
 
 A Canadian company’s last-minute offer to buy a shuttered Portales peanut butter factory for $25 million has been deemed to good to ignore. 
 
 A bankruptcy court judge Tuesday ordered that bidding for Sunland Inc.’s assets be reopened, thus accommodating Golden Boy Foods’ late-to-the-game offer to pay $25 million — $5 million more than the high bidder at an auction last week. 
 
 The auction will continue at 10 a.m. today in U.S. Bankruptcy Court in Albuquerque. Golden Boy’s $25 million offer will serve as the opening bid. 
 
 Judge David Thuma will consider final approval of the winning bid in a separate hearing set for 1 p.m. 
 
 Thuma’s ruling to reopen bidding comes after several dramatic days in Sunland’s Chapter 7 bankruptcy case. North Carolina-based peanut processor Hampton Farms had outbid Calif.-based Ready Roast Nut Co. in a courtroom auction last Thursday with its price of $20.05 million. They were the sole bidders. 
 
 But just minutes before the sale was to go before Thuma last Friday for final approval, a representative from Golden Boy Foods called trustee Clarke Coll with the $25 million offer. The British Columbia company wired the $25 million to a title company Monday. 
 
 Both Hampton Farms and Golden Boy say they would resume manufacturing operations at the Portales plant. 
 
 Coll and his attorney in the matter, Thomas Walker, say the additional $5 million offered by Golden Boy would help settle more of Sunland’s debt. Coll said Sunland has about $21 million in secured debt, plus another $2.5 million in administrative claims and an estimated $40 million in unsecured claims. 
 
 Walker said Tuesday that the judge’s decision to reopen bidding will benefit the creditors. 
 
 “The farmers, the people who are owed money by this bankrupt company are going to benefit because of this,” he said. 
 
 Hampton Farms’ attorney did not return a Journal message Tuesday. But the company’s lawyers argued in a Monday hearing that the judge should honor Thursday’s auction results and that anything less would create uncertainty and deter bidding in future bankruptcy cases. 
 
 As part of his Tuesday ruling, Thuma wrote that he was “loath to disturb the results of a judicial auction,” but that he couldn’t ignore the extra $5 million at stake. 
 
 “Given Golden Boy’s $25 million upset bid, the Court cannot make a finding that the sale to Hampton (for $20,050,000) is in the best interests of the estate,” Thuma wrote. 
 
 Golden Boy’s bid may have arrived late to the auction, but its interest in the Sunland plant was not new. 
 
 Paul Henderson, president of the company’s nut butter division, said in court Monday that Golden Boy had contacted Coll last November and even sent representatives to tour the Sunland facility. 
 
 But Golden Boy was in the process of being sold, and its parent company didn’t want to complicate that deal with the acquisition of Sunland’s assets, he said. Henderson told Coll that Golden Boy was withdrawing as a possible buyer. 
 
 Golden Boy’s sale to Post Holdings was finalized Feb. 1. Henderson said he incorrectly believed that Sunland had been bought but learned on March 18 that, in fact, an auction was set for March 20. He said he and his boss scrambled to get corporate approval from Post to make an offer. 
 
 Once they did, Henderson tried to reach Coll at his Roswell office Friday morning but only could leave a message. He ultimately tracked Coll down that afternoon with a phone call to the Albuquerque courthouse. 
 
 Coll said he received Henderson’s call about 10 minutes before the hearing to approve the sale to Hampton Farms. 
 
 “You can’t make this stuff up,” Coll testified Monday. “Life’s stranger than fiction. He offered me $25 million. I thought it was a joke.” 
 
 Sunland filed for bankruptcy in 2013, a year after it was linked to a salmonella outbreak. Located in Valencia peanut growing country, Sunland had been the nation’s largest producer of organic peanut butter and had made products for retailers such as Trader Joe’s, Costco and Target. 
 
 Sunland recalled hundreds of products in the wake of the outbreak and had its plant shut down for several months by federal regulators. 
 
 The company resumed peanut butter production last May but cited “ongoing financial and liquidity challenges” when filing for Chapter 7 bankruptcy liquidation last October.
– Almost a million jars of peanut butter are being trucked to a New Mexico landfill after Costco refused to either accept them or allow them to be donated to food banks. The peanut butter—made from $2.8 million worth of Valencia peanuts owned by Costco—is being dumped as part of the sale of a bankrupt plant linked to a huge peanut butter recall in 2012, reports the AP. Sunland, once the nation's largest producer of organic peanut butter, went bankrupt last year following the much publicized salmonella outbreak, and a Canadian company has snapped up the plant for $25 million, the Albuquerque Journal reports. The jars had been sitting in a warehouse since last fall, and while court filings say "all parties agreed there's nothing wrong with the peanut butter from a health and safety issue," Costco on March 19 said it had to be destroyed; the company previously determined the jars were "not merchantable" because of leaky peanut oil. The last of 58 truckloads of peanut butter is due to arrive at a landfill in Clovis today, where it will be covered in dirt. A spokeswoman for New Mexico's largest food bank declined to comment on the peanut butter dump, but noted that "rescued food" accounts for 74% of what it distributes. And the drama doesn't end there: The AP notes that a North Carolina company had won the first round of bidding for Sunland with a $20 million offer, only to be outbid by Golden Boy Foods just minutes before the court hearing that would have approved Hampton Farms' purchase; Hampton Farms is prepping for an appeal. (New Mexico landfills have been in the news lately.)