After Bankruptcy Pilgrim’s Pride Scolds “Bailout Banks”

January 11th, 2010 by Reed Allmand

Pilgrim’s Pride, which emerged from bankruptcy this week has scolded American banks who received bailouts, saying that not one bank offered the poultry company credit after its bankruptcy.  A fact, says Pilgrim’s Pride, that forced it into the arms of foreign lenders.

A bankruptcy judge approved a deal in which JBS of Brazil invested $800 million in the Pittsburg-based company, receiving in return 64 percent of the shares and six of nine board seats. Existing shareholders received the rest of the shares. The company announced that a consortium of banks, most of them foreign, extended a $1.75 billion loan, which along with JBS’ capital will allow Pilgrim’s to pay off all secured and unsecured creditors.

Well at least the “bailout banks” aren’t discriminating.  They equally ignore big business as well as the individual debtor.  What exactly were these bailout funds for? Weren’t they designed to restart the engine of lending, stop foreclosure and help companies emerge from bankruptcy with a fighting chance of survival?  Why is it that this poultry company needed to go to foreign lenders when the American taxpayer loaned billions of dollars to the banks so that they could then lend it to other businesses?   That was their responsibility. It was their promise. They said, “we’re too big to fail” and promised that if we helped them out, they would in turn help us. But of course that never happened. Lending remains stagnant, foreclosures continue to climb and only a handful of homeowners facing foreclosure have received permanent loan modifications.  And who knows how effective and affordable those modifications are since there is no real oversight on the “bailout banks.”