Custom Poultry Processing
A poultry processor in Charles City, IA.
A family of growers decided to construct a poultry processing facility to slaughter and package their own birds and those of local growers. When the plant opened in December 2010, it was 4 months behind schedule, had cost far more than projected, and was not complete. The company ran out of cash in the third week of January and unsecured creditors filed an involuntary Chapter 7 which was converted to a Chapter 11.
Equity Partners was retained to find capital to get the facility back up and running. The debtor’s plan was to try and reorganize. We agreed to try and support this effort but recognized that a sale was highly likely. We conducted a broad and aggressive marketing and sales campaign, leading to 53 parties from throughout the U.S., Korea, Canada and Mexico executing Confidentiality Agreements and 10 groups conducting site visits.
Because the company had no customer base and the plant had never been fully operational, there was no interest in reorganizing, resulting in a 363 auction. Five bidders qualified for the auction, including the first-position secured who wanted to ensure it could credit bid and a firm from Mexico and Canada. There were multiple rounds of bidding which started at about $500,000 and rose to $2,275,000. A closing was scheduled and the company restarted operations.