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Townsends, Inc. - Major Poultry Producer - Filed for Chapter 11 Protection Sunday

|Includes: Pilgrim's Pride Corporation (PPC), SWY

On Sunday, December 19, 2010, Townsends, Inc. and four affiliates - Townsend Farms, Inc.; Townsends of Arkansas, Inc.; Townsend Farms of Arkansas, Inc.; and Crestwood Farms LLC - voluntarily filed for chapter 11 bankruptcy protection in Delaware.  The companies, which are third-generation family-owned, describe themselves as "leading producers and marketers of quality, value added poultry products to the foodservice and retail grocery markets throughout the world."  They contract with more than 300 growers with over 1,200 chicken houses, have over 3,000 employees, and generated over $504 million in revenue for the twelve months ended December 5, 2010.  As of the same day, the companies consolidated financial statements reflected assets of $131 million and liabilities of $127 million.

The companies sell their poultry both to the food service industry and direct to consumers.  Townsends' consumer brands include Speedy Bird™ Value Added Chicken, Chef’s Select™ Breast Filets, Pristine Cuisine™ Organic Chicken, Perfect Breast® Fresh Portions, Townsend® Fresh Chicken, Townsend® IQF Chicken, and Speedy Bird™ Antibiotic Free Chicken.  The companies have over $70 million in outstanding obligations ($40 million revolving, $20 million term, and $12 million in letters of credit) under a Loan Agreement owing to a bank group including Greenstone Farm Credit Services, ACA/FLCA, Agstar Financial Services, PCA, and PNC Bank, N.A.  Wilimington Trust Company is the collateral and administrative agent to the bank group.  The companies also issued 8.44% notes due June 1, 2013 to John Hancock Life Insurance Company (U.S.A.), John Hancock Insurance Company of Vermont and John Hancock Life & Health Insurance Company.  As of Sunday, the aggregate principal and interest obligations on the notes were approximately $8.3 million.

Key court filings to date include (click on the title of any document for more information or to purchase):

 
 
For access to all major pleadings filed in this case, please visit http://www.chapter11cases.com/Townsends-Incfka-Townsend-Specialty-Foods_c_11223.html