Meadowbrook Farms, an Illinois pork plant, is experiencing cash flow problems and plans to file Chapter 7 bankruptcy proceedings within the next week.
The pork cooperative’s 4,000-head-capacity plant’s indebtedness follows layoffs of 600 employees earlier this month, according to a Dow Jones Newswire report. The source of the company’s cashflow problems stems from a default on a contract with Triad Foods Group of Chicago, which left Meadowbrook Farms with $4 to $5 million in losses.
In a letter dated March 5 to all members and creditors of the cooperative, the board of directors stated that efforts to find new financing failed. The cooperative discontinued slaughtering hogs earlier this year when funding ran short in relation to the Triad deal.Meadowbrook Chief Executive Officer Richard Klene was quoted in an Associated Press report as saying he is still trying to find a multimillion-dollar loan or an investor to keep the company alive.