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The company, based in Pittsburg in northeast Texas, was founded by Lonnie "Bo" Pilgrim, 80, who has given $2.5 million to state Republican and anti-lawsuit political committees since 2000.
Pilgrim's Pride attributed the bankruptcy to high feed prices, weak market conditions, high fuel costs and a heavy debt load tied to last year's acquisition of competitor Gold Kist.
A corporate news release said the Chapter 11 filing in U.S. Bankruptcy Court for the Northern District of Texas was to address "short-term operational and liquidity challenges." The company will continue operating under the bankruptcy protection.
"Over the past year, Pilgrim's Pride has faced a number of significant challenges, including high feed-ingredient costs, an oversupply of chicken, weak market pricing and softening demand," company President Clint Rivers said in a prepared statement.
The company asked the bankruptcy court to approve $450 million in debtor-in-possession financing arranged by the Bank of Montreal. It said in its filing that as of Sept. 27, it had $3.8 billion in assets and $2.7 billion in debts, the Associated Press reported.
Pilgrim's Pride declined a request for an interview with its founder.
The company said it employs about 48,000 people and operates 35 chicken processing plants and 11 prepared-food facilities.
According to its Web site, Pilgrim's Pride is the largest chicken company in the U.S. and the second largest in Mexico, with net sales of $7.6 billion last year.
The company's shares, which have plunged in recent weeks, dropped to 62 cents Monday, down 53 cents, before trading in the stock on the New York Stock Exchange was halted at midday.
The Houston Chronicle earlier this year reported that Pilgrim had given $100,000 to the Republican Governors Association six days after meeting with Gov. Rick Perry, then the association's chairman.
The next month, Perry requested a federal waiver from ethanol standards that Pilgrim believed were driving up the costs of feed by diverting feed crops to fuel production.
Pilgrim also donated $25,000 to Perry's political committee and paid $9,000 for Perry and his staff to fly to Washington for a news conference to pressure the U.S. Environmental Protection Agency to grant the waiver. The EPA eventually decided against the waiver.
During the early 1980s, Republican Gov. Bill Clements appointed Pilgrim to chair the state agency that oversaw water pollution enforcement. During that time, his company was accused of violating state water quality discharge standards but was never fined by the state.
Pilgrim shocked the state in 1989 when he handed out $10,000 checks to nine state senators on the Senate floor during a committee hearing on worker's compensation legislation that Pilgrim supported because it would limit worker lawsuits. Poultry workers often suffer hand injuries.
Public outcry over the incident led to the creation of the Texas Ethics Commission in 1991 as well as a ban on campaign contributions changing hands in the state Capitol.
Pilgrim in the past several years also has promoted immigration reform that would give some kind of legal status to workers now in the United States illegally.
"If we lose those people, the economy of the United States will simply go down the drain," Pilgrim told an immigration conference in 2007.
Federal immigration officials in April arrested more than 280 workers at Pilgrim's Pride plants in five states, charging them with identity theft to obtain employment. Pilgrim's Pride was not charged in the case.
To see more of the Houston Chronicle, or to subscribe to the newspaper, go to http://www.chron.com. Copyright (c) 2008, Houston Chronicle Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
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