FORT WORTH, Texas (AP) -- Pilgrim's Pride will start the procedures for selling two processing plants slated to shut down, under an agreement reached through mediation with opponents of the closures.
The nation's largest chicken producer will solicit bids until mid-May to sell plants in El Dorado, Ark., and Douglas, Ga., and a sale hearing will be held within a month if one is accepted, according to the agreement approved Tuesday by U.S. Bankruptcy Judge Dennis M. Lynn.
Farmers and government officials in Arkansas and Georgia agreed to withdraw their objections to the plant closures. Some 160 farmers who raised chickens for the Arkansas plant will receive about $2.3 million and the Georgia farmers will receive an amount that will be determined by the mediator and the company, said Richard Levy, a Dallas attorney representing many of the El Dorado farmers.
The terms of the agreement are on hold for another plant slated for closure -- in Farmerville, La. -- and farmers there. Last month Pilgrim's Pride agreed to sell it to California-based poultry company Foster Farms for $80 million, with half that cost paid by Louisiana. But the deal won't be complete without legislative backing.
Carrying a heavy debt load, Pittsburg, Texas-based Pilgrim's Pride filed in December for protection from creditors while it reorganizes under Chapter 11 of the federal bankruptcy code. It announced the three plant closures in February and said they would save $110 million.
The three plants in Arkansas, Georgia and Louisiana set to close in May employ about 3,000 workers and contract with about 430 farmers, the company said.
Arkansas Gov. Mike Beebe said Tuesday that the state is working with a group of private investors that have made an offer to buy the El Dorado plant to keep it open.
"If they are in fact taking bids, the state and especially (the Arkansas Economic Development Commission) will continue working with potential buyers who may make bids on the plant," Beebe spokesman Matt DeCample said after hearing news of the Pilgrim's Pride agreement.
Beebe said the state is offering money and incentives for the deal, declining to specify how much. But he said part of the money is coming from performance-based economic development incentives. He wouldn't say who was in the group of investors interested in the Arkansas plant.
Lynn also approved on Tuesday the company's request to sell a distribution center in Woodlawn, Ohio, for $675,000, and to start the process of selling its distribution center in Plant City, Fla. Neither matter was contested.
Associated Press writer Andrew DeMillo in Little Rock, Ark., contributed to this report.