Pilgrim's Pride Files For Bankruptcy Protection

Austin, TX (AHN) - Poultry producer Pilgrim's Pride Corporation, the largest poultry company in the United States, filed for bankruptcy protection Monday. Its filing for Chapter 11 with the U.S. Bankruptcy Court for the Northern District of Texas seeks to address the firm's short-term operational and liquidity challenges.

The company became bankrupt because of high feed costs, weak market conditions, high fuel costs and a heavy debt load after it purchased competitor Gold Kist in 2007, company officials said.

Pilgrim's Pride sought the approval of the bankruptcy court a $450 million debtor-in-possession financing scheme arranged by the Bank of Montreal. According to the company's filing as of Sept. 27 it has $3.8 billion assets and $2.7 billion debts.

The Texas-based company has 48,000 employees on its payroll and runs 35 chicken processing plants and 11 prepared-food plants. Despite its filing for bankruptcy protection, Pilgrim's Pride will continue to operate and not cut any jobs, company spokesman Ray Atkinson reportedly said.

Pilgrim's Pride was established by Lonnie Pilgrim, a major contributor to Texas' Republicans and anti-lawsuit political committees since 2000.