California poultry processor Zacky Farms filed for bankruptcy protection on Tuesday while outlining plans to sell the company that has been crippled by high feed costs as a result of tight corn and soybean supplies. Company officials said in a statement that normal operations and customer service will continue. Historically high feed prices led the company to incur “significant operating losses that have depleted its liquidity and working capital position” in its chicken and turkey businesses, according to the statement.
Court documents, filed on Monday in U.S. Bankruptcy Court in the Eastern District of California in Sacramento, listed between $50 million to $100 million in assets, with debts in the same range. Zacky Farms needs to borrow $71 million, at a 6-percent interest rate, in order to continue operating under a debtor-in-possession financing facility from The Lillian Zacky Family Trust. The loan, which must be approved by the bankruptcy court, will require “the commencement of an immediate sale process” to sell Zacky Farms as an ongoing concern, according to the court documents.
Zacky Farms is a privately held, family-owned operation, dating back to Samual Zacky opening a chicken shop in Los Angeles in 1928. The company is a previous member of the National Chicken Council. NCC President Mike Brown referenced this unfortunate announcement in a press release this week in support of the RFS waiver. Zacky Farms is the eighth poultry company to either file for bankruptcy, be sold, or simply close their doors in the last two years.
