US poultry firm files Chapter 11 bankruptcy
US integrated poultry company, Cagle's and its wholly-owned subsidiary Cagle's Farms have filed voluntary petitions for relief under Chapter 11 of the US Bankruptcy Code.
Cagle's emphasised that normal operations and customer service will continue without disruption, including sales, order processing, and delivery.
The company produces 1.7 million birds a week from two company-owned facilities. Contract growers are utilised for raising the poultry. Losses were running as much as $3 million a month as the result of the high price of feed and the low price for poultry, a court filing said.
Cagle's noted that, over the past few years, the poultry industry has been under severe stress due to historically high corn and soybean meal prices coupled with sagging chicken prices caused by an oversupply of broilers. As a result, Cagle's 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 Cagle's, Inc. and Cagle's Farms, Inc.," said J. Douglas Cagle, Chairman, President and CEO. "It is our goal to reach an agreement with our creditors in a quick and efficient manner, allowing us to restructure our debt with minimal disruption to our operations."
Cagle's has not set a target date for emergence from Chapter 11, but Cagle stressed that the company's strategy is to move quickly.
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