Zacky Farms files for Chapter 11 bankruptcy protection
Zacky Farms LLC announced that it has filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code. Zacky filed the petition today in the United States Bankruptcy Court for the Eastern District of California in Sacramento, Calif.
Zacky emphasized that normal operations and customer service will continue without disruption, including sales, order processing and delivery. In connection with its Chapter 11 filing, Zacky also announced that it has secured a debtor-in-possession (DIP) financing facility from The Lillian Zacky Family Trust. Zacky has also employed financial advisors to explore strategic alternatives to maximize value for its stakeholders.
Zacky noted that the poultry industry is a capital intensive and volatile business which, over the past few years, has been under severe stress due to historically high corn and soybean meal prices. As a result, Zacky has incurred significant operating losses that have depleted its liquidity and working capital position.
“After careful consideration we concluded that a Chapter 11 restructuring represents the best long-term solution for Zacky,” said Keith Cooper, Chief Restructuring Officer. “We appreciate the ongoing loyalty and support of our employees, growers, customers and vendors,” Cooper commented. “Their dedication and hard work is critical to our success. We remain committed to leading Zacky toward a strong and profitable future with the help of our employees, our growers, our customer base, and our vendor community. Zacky remains a viable business that is deeply committed to our employees and the customers that we serve.”
Zacky has not set a target date for emergence from Chapter 11, but Zacky stressed that the company’s strategy is to move quickly. “There is much work ahead,” he stated, “but time and time again, our employees have proven their ability to face significant challenges and handle change. By working together, we can preserve Zacky and its future.”
Zacky, headquartered in Fresno, California, is a vertically integrated poultry company that has been in operation for over 70 years.
Sources: Zacky Farms, Urner Barry