Bankruptcy Bidder for Zacky Farms to Keep Employees
Owning a business means going through many ups and downs. If a business begins experiencing more downs than ups, creditors may begin putting more pressure on the business owner to pay up. If the owner has more debt that money coming in, one option to get out from under the mounting debt is business bankruptcy.
Business bankruptcy, also known as Chapter 11 bankruptcy, can provide a business owner with many benefits. One of these benefits is that filing for bankruptcy stops creditors' pending actions against the business immediately. This means that mechanics liens and repossessions are stopped.
If the business is unable to create a debt repayment plan that is suitable and manageable for the business, the business may have to be liquidated. This is where a Fresno-based farming company is right now in the bankruptcy process. Zacky Farms has potentially found a buyer that would keep most of its current employees on the payroll.
The Robert D. Zacky and Lillian D. Zacky Trust has made a bid for $31.6 million dollars. This same trust provided the company with a $71 million loan in October 2012 to keep the company functioning.
The trust currently owns half of Zacky Farms. The estate of the former president owns the other half.
Zacky Farms is one of the country's largest turkey producers with most of its production in California.
The second-highest bid was for $22 million, and Pitman Family Farms submitted the bid; but its plan did not include retaining the current employees.
Typically, when a company files for bankruptcy, the company is able to create a court-supervised debt reorganization plan. Under this type of plan, interest payments are often reduced, and any accumulated penalties or fees can be significantly reduced or eliminated.
Source: Thebusinessjournal.com, "Zacky bankruptcy bidder plans to avoid layoffs," Gabriel Dillard and Michael Kincheloe, Jan. 18, 2013