Zacky Farms looks to $32.1 million back-up bid after trust withdraws

By Caroline Salls

Pittsburgh, Jan. 25 - Zacky Farms, LLC will seek approval of a $32.1 million bid submitted by Pitman Family Farms after the Robert D. Zacky and Lillian D. Zacky Trustees decided not to proceed with the winning bid for substantially all of the company's assets, according to a status report filed Thursday with the U.S. Bankruptcy Court for the Western District of Michigan.

Pitman's offer had been originally approved as the back-up bid after the Jan. 15 auction. The Zacky Trust decided not to go forward with the sale on Jan. 23 after reviewing all the provisions of the final documentation.

Although the sale hearing is scheduled for Jan. 28, the company said its official committee of unsecured creditors believes that the hearing on the sale and changes to a related debtor-in-possession lender settlement must be held on the same day.

As a result of the change in buyer, the economic terms of the settlement will now include cash proceeds from a sale to Pitman instead of promissory notes.

In addition, Pitman has requested an extension to Feb. 15 of the sale closing, which would require the DIP lender to continue to fund operations until that date.

The company said it would ask the court to approve scheduling changes after issues regarding the extension request are resolved.

Zacky Farms is a Fresno, Calif.-based poultry producer. The company filed for bankruptcy on Oct. 9 under Chapter 11 case number 12-37961.

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