Case filing & court posture: Rizo-López Foods, Inc., a Modesto, California-based manufacturer of Mexican-style cheeses and cream products, filed for chapter 11 protection on September 15, 2025 in the Eastern District of California (Case No. 25-25004). Dkt. 1 Judge Christopher M. Klein presides.
Pre-petition crisis: The filing followed a Listeria monocytogenes outbreak linked to the company’s products over a multi-year period, resulting in an FDA Consent Decree of Permanent Injunction in October 2024, a voluntary recall of all products, and cessation of most operations. Dkt. 7 At filing, the debtor carried approximately $10.2 million in secured debt owed to Wells Fargo and faced unsecured product-liability claims exceeding $70 million from commercial customers and potential consumer claimants.
Liquidity & financing path: The court authorized use of cash collateral on an interim basis on September 19, 2025, with adequate protection payments to Wells Fargo. Dkt. 66 Separately, the court approved interim DIP financing of up to $3.23 million from insiders Edwin and Ivan Rizo. Dkt. 67 Both authorizations have been renewed on a rolling interim basis through at least February 11, 2026. Dkt. 421
Conversion motion & sale process: The debtor filed a motion to convert to chapter 7 on October 27, 2025. Dkt. 202 However, a lead buyer subsequently emerged, and as of the January 2026 status conference the debtor was negotiating an asset purchase agreement for a section 363 sale of substantially all assets, with the motion to convert continued pending those negotiations. Dkt. 381
Current status: The case remains in chapter 11 with cash collateral and DIP financing continuing on interim orders. The debtor is pursuing a 363 sale while the motion to convert remains pending. Multiple creditors have filed motions for relief from the automatic stay. Dkt. 421
