A 'pink slime' maker files for bankruptcy

Ground beef processor AFA Foods said Monday it is filing for Chapter 11 bankruptcy protection and selling its assets after the public outcry over the beef filler known as "pink slime" derailed its efforts to save its already struggling business.

A spokesman said in an email that the company does not rely on boneless lean beef trimmings and uses it only based on customer specifications. But he said the controversy over the ammonia-treated meat filler has dramatically reduced demand for all ground beef products.

AFA Foods, based in King of Prussia, Pa., processes more than 500 million pounds of ground beef products a year. It distributes to retailers including Wal-Mart Stores Inc., Safeway Inc. and BJ's Wholesale Club. Fast-food chain customers include Burger King, Jack in the Box and Wendy's.

AFA also sells products under the brand names Moran's, Stone River Ranch and Miller Quality Meats.

In the affidavit filed as part of the bankruptcy, interim chief executive Ron Allen said the company has struggled for the past two years in a competitive industry marked by overcapacity and thin profit margins.

AFA Foods said it secured $56 million in financing from its lenders to fund operations and expects to continue serving customers throughout the process.

The outcry over "lean, finely-textured beef" has had real consequences for other businesses. Last week, the governors from three meat-producing states toured a plant of Beef Products Inc., the main processor of the beef additive, and criticized the media for scaring consumers with a moniker coined by critics.

Beef Products suspended operations at its plants in Texas, Kansas and Iowa last week because of the controversy, affecting 650 jobs. -- AP