Is H&H on the selling block?

MERCEDES — Rumors that H&H Foods is on the sales block have run rampant for months.

Even before the local food processing company filed for bankruptcy Dec. 31, the buzz in supplier and other circles was that a Latin American investor was interested in purchasing the operation.

On Monday, as speculation reached a fever pitch in industry circles, company officials did little to squelch the chatter.

“I don’t have any comment on this,” said H&H CEO Liborio Hinojosa Sr.

The company, which has produced chorizo and other food products in Mercedes for more than 60 years, filed for bankruptcy in the Texas Southern District Bankruptcy Court, claiming more than $9 million in debt to dozens of creditors.

The company belongs to Hinojosa and his family, including U.S. Rep. Rubén Hinojosa, D-Mercedes, a significant shareholder in the company. On Monday, the congressman’s office deferred questions on the company to his brother.

With the H&H’s chapter 11 reorganization bankruptcy, company officials said operations and sales would continue as is. A chapter 11 bankruptcy gives an organization time to settle debts with creditors without having key operating assets, like machinery and property, seized.

During the last five weeks, H&H and their creditors have spent several days in court trying to piece together details of the company’s debts. Court documents say the company is running deep in the red, and has already lost about $133,000 in the last three weeks. The company is projecting deeper losses in the coming months.

In all, H&H is claiming about $17.5 million in assets, including the company’s $7.8 million in real estate holdings. Much of that comes from its plant on Expressway 83 in Mercedes and related machinery.