DealZone

Pilgrim’s Pride: a bankruptcy gone right

December 29, 2009

The turnaround of Pilgrim’s Pride may have been long by 2009 standards, but as Emily Chasan reports creditors probably made out better from the chicken producer’s reorganization than any other bankruptcy in the past year.

On Monday, just over a year after the company entered bankruptcy protection, it emerged with new ownership, new management, and a new business plan, proving the traditional route through bankruptcy is not quite dead. Unsecured creditors got paid back in full, in cash, and stockholders — who usually get wiped out in bankruptcies — got a 36 percent equity stake in the reorganized company.

In a year, which featured the one-to-two-month bankruptcies of lender CIT Group and automakers Chrysler and General Motors, Pilgrim’s Pride took a more traditional trip through the process — staying in court just long enough to conduct a business turnaround.

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