Pilgrim's Pride poised to emerge from bankruptcy
December 10, 2009
by Bryan Salvage
PITTSBURG, TEXAS — The U.S. Bankruptcy Court for the Northern District of Texas has approved the amended joint plan of reorganization of Pilgrim's Pride Corporation and six of its subsidiaries that are debtors and debtors in possession in the Chapter 11 cases pending before the court.
Judge D. Michael Lynn entered an order confirming the amended plan of reorganization on Dec. 10, which follows a court hearing held Dec. 8 in Ft. Worth. This paves the way for the debtors to exit bankruptcy later this month. As a result, Pilgrim's Pride expects to emerge from bankruptcy before the end of December.
"This is a proud day for everyone at Pilgrim's Pride who has worked so hard over the past year to restructure our business," Don Jackson, president and chief executive officer, said after the court hearing. "The past 12 months have been filled with tremendous challenges and unprecedented opportunities. There have been a lot of tough, painful decisions made about the future of this company, yet our employees have joined together to create a new market-driven organization that is clearly focused on serving our customers."
The debtors filed a joint plan of reorganization and related disclosure statement with the court in September. Under terms of the reorganization plan, Pilgrim's Pride has agreed to sell 64% of the new common stock of the reorganized Pilgrim's Pride to JBS U.S.A. for $800 million in cash.
Completion of the transaction is subject to the closing of an exit facility for senior secured financing in an aggregate principal amount of up to $1.75 billion, certain regulatory approvals and other customary closing conditions.
The debtors filed voluntary Chapter 11 petitions on Dec. 1, 2008. The company's operations in Mexico and certain operations in the U.S. were not included in the filing and continue to operate as usual outside of the Chapter 11 process.
Pilgrim's Pride Corporation employs approximately 41,000 people and operates chicken processing plants and prepared-foods facilities in 12 states, Puerto Rico and Mexico.