Cagle's Inc. and its wholly-owned subsidiary Cagle's Farms Inc. have filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code. Cagle's filed the petitions in the United States Bankruptcy Court for the Northern District of Georgia in Atlanta, Ga.
According to the company, normal operations and customer service will continue without disruption, including sales, order processing and delivery. In connection with its Chapter 11 filing, Cagle's also announced that it anticipates receiving court approval for a debtor-in-possession financing facility from AgSouth Farm Credit, ACA. Over the past few years, said Cagle's, the poultry industry has been under severe stress due to historically high corn and soybean meal prices coupled with sagging chicken prices caused by an oversupply of broilers. As a result, Cagle's has incurred significant operating losses that have depleted its liquidity and working capital position.
"After careful consideration we concluded that a Chapter 11 restructuring represents the best long-term solution for Cagle's Inc. and Cagle's Farms Inc.," said J. Douglas Cagle, chairman, president and CEO. "It is our goal to reach an agreement with our creditors in a quick and efficient manner, allowing us to restructure our debt with minimal disruption to our operations."
Cagle's has not set a target date for emergence from Chapter 11.