According to an article in the Star-Telegram, Pilgrim’s Pride Corp. submitted a Chapter 11 bankruptcy reorganization plan to the bankruptcy judge as the first step in obtaining court approval for a sale of the company to Brazilian beef producer JBS SA.

The article said:

“The Pittsburg, Texas-based chicken producer filed its plan and a plain-English explanation of it, called a disclosure statement, to a bankruptcy judge for approval. If Pilgrim’s Pride secures the court’s OK on the disclosure statement at an Oct. 20 hearing, it can begin to solicit yay or nay votes from creditors on the plan itself.”

Under the Chapter 11 bankruptcy proposal, Pilgrim’s Pride would sell a 64 percent stake in the reorganized company to JBS for $800 million in cash. The proceeds from that sale would be used to repay their creditors in full while the existing company stockholders would be completely wiped out. The wiped out shareholders would be given shares in the new company.  Pilgrim’s Chapter 11 bankruptcy plan also proposes that they take out a bankruptcy exit loan of $1.65 billion.