New York, July 15 - Pierre Foods Inc, which makes precooked sandwiches for schools and convenience stores, said on Tuesday that it had filed for Chapter 11 bankruptcy protection, citing soaring food costs.
"As a result of rising raw material prices experienced throughout our industry, it is necessary for Pierre Foods to create a capital structure more appropriate for both our operations and the current marketplace," Chief Executive Norbert Woodhams said in a statement.
The Cincinnati-based maker of fully cooked beef, pork, chicken, turkey and bakery products listed assets of $349.5 million and debts of $441.3 million in a filing with the U.S. bankruptcy court in Wilmington, Delaware.
Some funds managed by Oaktree Capital Management L.P. have pledged as much as $35 million of debtor-in-possession financing, the company said in a statement.
Pierre also said it had begun discussions with affiliates of Oaktree that "may involve the conversion of debt of the company into equity through a plan of reorganization, which would result in material deleveraging of the company's balance sheet."
The company has retained restructuring and corporate advisory firm Alvarez & Marsal and said it planned to continue operations throughout the bankruptcy process.
Some of Pierre's largest trade creditors include Archer Daniels Midland Co and Cargill Inc, according to the bankruptcy filing.