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A ground beef processor owned partly by former basketball-legend-turned-entrepreneur Magic Johnson has filed for bankruptcy. The company is blaming a decrease in consumer and business demand for beef, which can be attributed to the recent negative press that has surfaced with regards to the “pink slime” food additive that is found in it, reports the Palm Beach Post.

AFA Foods Inc., based in King of Prussia, Pennsylvania, operates seven facilities nationwide and supplies beef to such major vendors, such as Safeway, Wal-Mart Stores, Burger King, Jack in the Box, Carl’s Jr., and Wendy’s, has been negligent in paying its debts and is unable to secure bank loans.

Johnson, along with his partners, have filed bankruptcy with the courts because the company “faced with an immediate and unanticipated liquidity crisis.” According to the company’s interim CEO Ron Allen, profits suddenly took a sharp dive due to “an unfounded public outcry over the use of boneless lean beef trimmings,” he told the Palm Beach Post.

Coupled with the bankruptcy filing comes the likelihood of a layoff of more than 850 employees, although a company spokesperson states that they plan on conducting a quick sale of its assets while keeping layoffs to a minimum.

Read more at newsone.com

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