Charles City officials are unsure what the selling of the bankrupt Pure Prairie Poultry (PPP) chicken processing plant means down the road.
According to a report by KAAL-TV, a Minnesota judge approved the sale of PPP in Charles City and ‘certain acquired assets’ to Community Bank and Trust on June 3rd.
Originally, 4G Poultry of Texas had offered $6 million in cash for the plant and assets. Then the bank and former Pure Prairie board member Michael Helgeson entered “credit bids,” meaning they traded the right to extract $27.8 million in debt from the chicken plant, in exchange for the plant itself, with CB&T allegedly offering $25.7 million, with Helgeson $2.1 million.
The State of Minnesota approved the sale to the bank and Helgeson, as the value of the $27.8 million debt was greater than the $6 million cash offer.
In mid-April, KAAL reported Pure Prairie Poultry owed creditors about $139 million, but only had about $3.3 million in assets, plus whatever they made from the sale of the plant. In accepting a credit bid, the bankrupt chicken plant has reduced its debt to around $111 million, but didn’t gain any cash to help pay back other creditors.
Charles City City Administrator Steve Diers said in an email to KCHA/KCZE that “KAAL reached out to the city yesterday (06.10) to ask us about the plant’s sale and that was the first we’d heard about anything. At this time we do not know what this means for the plant or the city going forward.”
Court documents reference Community Bank and Trust’s position as the executor of a USDA Food Supply Chain Guaranteed Loan to Pure Prairie Poultry in April of 2023. The documents do not say whether or not the bank will be required to repay any of the loan to the U.S. government.
