Court to OK Pilgrim's Pride reorganization

AP News
Posted: Dec 09, 2009 12:05 PM

Chicken producer Pilgrim's Pride Corp. said Wednesday it expects a court to approve its reorganization plan, most likely by later this month.

The company, based in Pittsburg, Texas, filed for Chapter 11 bankruptcy protection last year, as it was hobbled by debt and struggled to pay high feed costs. Spokesman Ray Atkinson said the U.S. Bankruptcy Court in the Northern District of Texas has indicated it will approve the plan.

"The judge said on the record that he was going to approve the plan, subject to working out certain language in the confirmation order," he said in an e-mail.

Atkinson said the company continues to expect to emerge from bankruptcy later this month.

In September, Brazilian beef company JBS said it would buy a majority stake in Pilgrim's Pride for $800 million in a transaction that would include paying off Pilgrim's Pride's creditors in full and distributing new shares to current holders.

That's unusual for a company in bankruptcy protection because typically creditors aren't repaid. The entire deal is valued at $2.8 billion, and it and another announced last month would make JBS the world's biggest meat maker.

The Federal Trade Commission and Department of Justice have cleared the way for the deal.