Zacky Farms to sell assets to Lillian Zacky Family Trust

US-based poultry processor Zacky Farms, which filed for bankruptcy in October 2012, is set to sell its assets to the Robert D Zacky and Lillian D Zacky Family Trust, in a deal estimated to be valued at $31.6m.

The acquisition by the Robert D Zacky and Lillian D Zacky Family Trust, which currently owns a 50% stake in the Zacky Farms, ensures that the company remains under the control of the Zacky family.

As part of the deal, which is subject to approval by the bankruptcy court, the company is expected to retain substantially all of its employees.

In a bankruptcy auction held earlier this month, the Robert T and Lillian D Zacky Trust submitted the highest bid for the company, beating Pitman Family Farms, which offered $22m in cash but without the agreement to retain the employees.

Zacky Farms chief restructuring officer Keith Cooper said that with the Zacky Trust winning the bid, the operations and jobs of Zacky Farms are preserved.

"Further, this result confirms the commitment of Lillian Zacky and Scott Zacky to the continued operation and turnaround of Zacky Farms," Cooper added.

On 8 October 2012, Zacky Farms filed for voluntary bankruptcy in the United States Bankruptcy Court for the Eastern District of California in Sacramento, California, blaming high feed costs due to a drought in the US.

The company, which had listed assets worth $100m, noted that it owed its creditors as much as $100m.

Zacky Farms supplies chicken and turkey products to grocery stores and companies in the foodservice sector.

The company employs about 1,500 people in Fresno, Los Angeles, Tulare, Kings and San Joaquin counties in Southern California, and produces its own feed and operates a distribution fleet.