Gardenburger Inc., which makes meatless patties sold in grocery stores, sought bankruptcy Friday and said it will become a private company after its shares plunged 93 percent in the past year.
The company, which has a plant in Clearfield, listed $20.2 million in assets and $40.2 million in debts in Chapter 11 documents filed Friday in U.S. Bankruptcy Court in Santa Ana, Calif. Gardenburger plans to exchange debt for new equity.
New York-based Annex Holdings I LP is Gardenburger's largest unsecured creditor, holding a $27 million convertible note.
Reorganizing will create "a simpler, more efficient and cost-effective company," Gardenburger said. The company, based in Irvine, Calif., said it decided to pursue bankruptcy after failing to find a buyer.
Gardenburger said in its annual report in February that profit was being hurt by consumers' turn toward low-carbohydrate diets.
The company, founded in 1985 and employing 167 people, reported a loss of $11.1 million on sales of $33.8 million in the nine months through June.
The company said it cut carbohydrates and added protein to its veggie burgers it makes in Utah and is selling meatless meatloaf and chicken.