Hog Producer AgFeed Seeks Chapter 11 Bankruptcy Protection
Hog producer AgFeed Industries Inc. filed for chapter 11 protection yesterday after agreeing to wind down its supply contract with its main U.S. customer, Hormel Foods Corp., which purchases weanling pigs and hogs from the company, the Wall Street Journal reported today. AgFeed plans to sell its U.S. operations while under chapter 11 protection, and it is also looking for a buyer for its Chinese units, which aren't included in the U.S. bankruptcy case. The Hendersonville, Tenn.-based company has lined up a $79 million leading bid for most of its U.S. assets from Maschhoffs LLC, a Carlyle, Ill., hog production network, according to court papers. The company has been involved in a dispute with Hormel that led to an arbitration award of $7.9 million against AgFeed earlier this year. This decision spurred an event of default under the company's $68.5 million credit facility, which matured in February and hasn't yet been repaid.