March 10, 2009
Illinois Pork Cooperative to file for Chapter 7 bankruptcy
The Meadowbrook Farms Cooperative, which owns a 4,000-head per day pork processing plant in Rantoul, Illinois, will file for Chapter 7 bankruptcy, a liquidation of all assets.
In a letter dated March 5, to all members and creditors of the cooperative, the board of directors stated that efforts to find new financing failed. The cooperative discontinued slaughtering hogs earlier this year when funding ran short. The firm had filed a US$2 million law suit against Triad Foods over an alleged contractual default.
A US$6 million bridge loan or infusion of capital would have been needed to keep the cooperative in business, but efforts to secure the funding failed.
The letter, a copy of which was attained by Dow Jones Newswires, stated that at the direction of the Bankruptcy Court, all assets of the cooperative "will be placed under the control of a Bankruptcy Trustee and he/she will then liquidate them to pay as many of our debts as possible."
The plant closed down on Jan. 30 and about 600 hourly employees were laid off.
Hog supplies that had been going to the Rantoul plant are now being sold to other packers in the region.
