Subject: Allen Family Foods files for bankruptcy, to end processing | The News Journal | delawareonline.com
From: "Eric Schwerin" <[email-masked]>
To: "Hunter Biden" <[email-masked]>
Date: Fri, 10 Jun 2011 22:26:30 -0400

http://www.delawareonline.com/article/20110610/BUSINESS/106100344/Allen-Family-Foods-files-bankruptcy-end-processing?odyssey=mod|newswell|text|Home|s

Allen Family Foods files for bankruptcy, to end processing

The four-generation, 92-year-old Allen Family Foods Inc. announced Chapter 11 bankruptcy Thursday, saying it plans to sell nearly all its assets to a new affiliate of Mountaire Farms of Delaware Inc. -- then close its three-state operations.

Allen plans to keep only corporate-owned grow-out farms and related land, with a small but yet-to-be-set number of employees.

About 2,400 people work for the Seaford-based poultry producer at facilities in Delaware, Maryland and North Carolina, processing about 1.6 million birds weekly, with gross annual revenues of about $380 million.

Almost all Allen jobs are to disappear in July -- but an unknown number may be added at Mountaire.

Mountaire -- in a statement hours after Allen's bankruptcy and closure announcement -- said it is expanding operations and hiring at its Selbyville and Millsboro sites, to process 400,000 more birds a week under its newly formed affiliate, Seaford Milling Co., set to buy Allen assets at an undisclosed price.

Mountaire did not say what, if anything, it would do with the Allen facilities or how many employees or growers it plans to hire.

Allen's operations are to continue until the sale, due in late July, then close immediately, said Keith Cooper, its chief restructuring officer. Debtor-in-possession financing will enable the company to pay employees, growers and suppliers.

Allen has about $82 million in secured debt owed to farm credit banks, led by Mid-Atlantic Farm Credit Bank, and about $500,000 to Wilmington Trust, Cooper said. The company suffered what it called "significant operating losses" as the industry suffered severe stress in recent years from record corn and soybean prices and "sagging chicken prices caused by an oversupply of broilers" from near-record production, its leaders said in a statement.

Given the economy and poultry industry's state, employees are responding "as well as can be expected" to the plan, Cooper said, but "it's a bit of a shock."

Last year, Allen sold its Hurlock, Md., production complex and Delmar feed mill to a South Carolina company, but expanded its Harbeson operation.

Eric D. Schwerin
Rosemont Seneca Partners, LLC
1010 Wisconsin Ave., NW
Suite 705
Washington, DC 20007
(202) 333-1880
[email-masked]
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