Pure Prairie Poultry, Inc.'s chapter 11 case ended in dismissal after seven days, once lenders objected to the priming lien structure required for a proposed $15 million DIP facility meant to keep its Charles City, Iowa processing plant running during a sale process. The company filed for chapter 11 on September 20, 2024 in the U.S. Bankruptcy Court for the District of Minnesota, and the court entered a dismissal order on September 27, 2024 after the debtor asked to dismiss the case.
The filing followed a short operating history at a recently refurbished plant and a funding stack that included USDA-backed financing and private debt. The plant ceased processing on October 2, 2024, after the company told Iowa officials it could not afford feed. The shutdown left birds across the supply chain without a processing outlet, prompted state updates on depopulation efforts, and drew federal scrutiny of the USDA funding.
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Restructuring attempt and dismissal
The case began as a short-form restructuring aimed at stabilizing liquidity and running a sale process. The debtor filed a package of first-day motions seeking authority to use cash collateral, pay prepetition wages, continue utilities, maintain insurance, and preserve cash management arrangements. The centerpiece was a proposed $15 million DIP facility from Sandton Capital Solutions Master Fund VI, LP that would have funded immediate working capital and sale milestones if the court granted priming liens and superpriority status. The motion contemplated an initial draw to repay Packers and Stockyards Act obligations, additional draws upon entry of a final DIP order and bidding procedures order, and a 90-day maturity with extension mechanics tied to milestones.
The first-day declaration also said a shutdown would likely result in the loss of more than 138 jobs, reinforcing the debtor's argument that emergency relief was needed to keep the plant operating and maintain feed purchases while a sale process was pursued.
The proposed financing structure drew objections from Community Bank & Trust, SouthStar Financial, and multiple agricultural cooperatives that asserted liens on accounts receivable or feed inventory. Those objections led the debtor to file an expedited motion to dismiss on September 25, 2024, stating it could not obtain priming liens required by the DIP and did not have liquidity to maintain operations or insurance coverage. The motion also warned that without financing the company could be forced to depopulate as many as two million chickens tied to its production system.
The dismissal motion included a short-term cash forecast that showed negative operating cash flow even with planned collections. The debtor projected about $3.2 million in cash collections over the next six weeks, about $11 million in revenue over thirteen weeks, and negative cash flow of about $10.8 million during the first six-week period. The motion also cited at least $5.5 million of immediate expenditures needed to stabilize operations. The debtor concluded that a stand-alone chapter 11 case without a priming DIP was not viable.
Date
Event
August 2019
Prior owner closed the Charles City plant
December 2021
Pure Prairie acquired the facility
November 2022
Limited operations began with primary processing
November 2023
Secondary processing capacity achieved
September 20, 2024
Chapter 11 petition and first-day motions filed
September 25, 2024
Secured lenders and cooperatives object to the DIP motion
September 25, 2024
Debtor files expedited motion to dismiss
September 27, 2024
Court grants dismissal motion
September 30, 2024
Company told Iowa officials it could not afford feed
October 2, 2024
Plant stopped processing
October 17, 2024
Iowa Department of Agriculture began depopulation of about 1.3 million birds
May 2025
Minnesota court approved a credit-bid sale of the company's assets
Key Timeline
DIP financing terms (proposed). The DIP motion described a facility of up to $15.0 million with a 20% PIK interest rate, a $375,000 issuance fee, and an unused fee. The maturity was the earliest of a sale closing, a plan effective date, an event of default, or 90 days after the initial draw, with a possible 90-day extension for a fee. The proposed budget and milestones were built around obtaining a final DIP order within 28 days, a bidding procedures order within 45 days, and a sale closing within 100 days. Those terms were never approved because the required priming liens were not granted. In the motion to dismiss, the debtor said the milestones could not be met without priming financing because it lacked the liquidity to cover feed purchases, vendor payments, and payroll while a sale process unfolded.
Outcome. The dismissal order ended the chapter 11 case after seven days. The case did not advance to a bar date order, a disclosure statement, or a sale process order, and the debtor shifted to non-bankruptcy paths to resolve creditor claims.
First-day motions and operating continuity
The first-day motion package focused on keeping the Charles City plant running long enough to stabilize operations and preserve the company's sale process options. The debtor sought authority to pay prepetition wages and benefits, continue workers' compensation programs, maintain insurance coverage, and preserve existing utility arrangements. It also requested authority to keep its existing cash management system and bank accounts, and to pay prepetition sales and use taxes. In the filings, those requests were tied directly to the need for uninterrupted operations and the ongoing purchase of feed and other inputs.
Those operating motions were paired with requests for procedural relief. The debtor sought an extension of time to file schedules and statements of financial affairs and asked the court to extend the automatic stay to protect officers and directors while the company attempted to keep operations intact. The company also filed a notice of intent to seek an expedited hearing, and the court scheduled a hearing for September 27, 2024, the same day it heard and granted the motion to dismiss.
The docket also reflected the administrative setup of a typical chapter 11 case. The debtor applied to retain Epiq Corporate Restructuring, LLC as claims and noticing agent to manage service of process and claims administration. A meeting of creditors was scheduled for October 21, 2024, but the case was dismissed before it could occur. With the case ending in late September, the court never entered a bar date order or other claims administration deadlines.
USDA-backed financing and capital structure pressures
Pure Prairie's capital structure included USDA-supported financing intended to fund a plant refurbishment and a regional launch. The debtor said in the first-day declaration that it qualified in April 2022 for a Food Supply Chain Guaranteed Loan Program facility of nearly $39 million. On October 21, 2022, USDA announced a $38.72 million loan guarantee and a $6.963725 million Meat and Poultry Processing Expansion Program grant. The debtor began drawing on the grant in January 2023 and closed the guaranteed loan on April 26, 2023, with an initial principal of $36.7425 million issued through Community Bank & Trust. The company later faced questions from lawmakers about the oversight of that funding after the plant shutdown.
The USDA-backed loan carried a fixed 9.75% interest rate with interest-only payments until May 2025, and the first-day declaration listed an outstanding balance of about $33.4 million as of June 29, 2024. The loan, together with Bremer Bank and shareholder debt, formed the debtor's secured capital structure.
The first-day declaration reported that a six-month delay in receiving USDA loan funds and completing plant renovations led to a nine-month delay in the broader product launch because of seasonal retailer windows. It also reported about $38 million in operating losses from November 2023 to the petition date and said Bremer Bank declined to increase a line of credit from $7.5 million to $12 million in early 2024. The company subsequently entered short-term financing and revenue purchase agreements.
The capital structure included multiple layers of security interests and statutory liens: Community Bank & Trust held a first-priority construction mortgage on the plant, Bremer Bank held a first-priority lien on a broad collateral package, and several agricultural cooperatives asserted input liens tied to feed deliveries. Mechanics lien claims were filed by construction contractors related to the refurbishment. The debtor also listed vehicle financing liens and a factoring arrangement tied to accounts receivable.
Feed and mechanics liens. The company's supply chain depended on contracted growers and feed suppliers, whose feed liens sat within the collateral package the proposed DIP sought to prime. The first-day declaration listed input liens tied to feed deliveries from First Cooperative Association (d/b/a AgState) at $356,214.64, Centra Sota Cooperative at $640,499.43, Gold Eagle Cooperative at $96,880.33, and Premier Cooperative at $1,595,899.67, and the cooperatives were among the parties that objected to the DIP motion. The declaration also listed mechanics liens from the plant refurbishment, including a $1.13 million lien from The Waldinger Corporation and a $1.36 million lien from Henkel Construction. Community Bank & Trust objected to the proposed DIP and would not subordinate its claim without USDA approval.
Facility or claim
Approximate amount
Notes
Community Bank & Trust (USDA-backed FSC loan)
$36.27 million (principal + interest)
First-priority construction mortgage
Bremer Bank
$8.36 million
First-priority lien on broad asset package
Michael Helgeson
$17.10 million
Mortgage subordinated to CB&T
Feed supplier input liens
$2.69 million
Agricultural cooperatives
Mechanics liens
$1.13 million (Waldinger) + $1.36 million (Henkel)
Plant refurbishment claims
Factoring / revenue purchase agreements
Approximately $3.5 million disputed secured claims
FFG, Dynasty, Ace, Liquidity Access
Revenue purchase agreements. The first-day declaration listed several revenue purchase agreements executed in mid-2024 that advanced cash in exchange for percentages of revenue. The debtor disclosed a July 2024 agreement with Family Funding Group and a July 2024 agreement with Dynasty Capital, followed by two August 2024 agreements with ACE Funding Source and an August 2024 agreement with Liquidity Access. The agreements were structured as purchases of future receivables with fixed remittance targets, and the debtor stated that the validity and perfection of those liens were disputed. The CFO served as guarantor for those agreements and for vehicle financing obligations.
Counterparty
Agreement date
Purchase price
Net proceeds (as stated)
Remittance target
Family Funding Group LLC
July 8, 2024
$500,000
$450,000
$749,500
Dynasty Capital 26, LLC
July 18, 2024
$2,200,000
$250,000
$3,300,000
ACE Funding Source LLC (RPA No. 1)
August 6, 2024
$200,000
$100,058
$299,800
ACE Funding Source LLC (RPA No. 2)
August 7, 2024
$111,000
$99,900
$166,389
Liquidity Access, LLC
August 16, 2024
$500,000
$282,757.50
$750,000
The filings described these revenue purchase agreements as additional secured claims layered on top of the USDA-backed loan and other liens, leaving limited unencumbered assets to support the priming liens the proposed DIP required.
Operations, growers, and the Charles City plant
The first-day declaration said Pure Prairie's operating model was built around a regional supply chain centered on a single plant in Charles City, Iowa. The company contracted with about 50 growers who raised birds under its branded program and held equity stakes in the company. The plant produced whole birds in late 2022 and added secondary processing by November 2023, after a refurbishment period following an earlier shutdown by a prior owner in 2019.
The chapter 11 petition and supporting declaration said the company began selling products in November 2023 and, by the petition date, had distribution in regional grocery stores and food markets across Minnesota, Iowa, North Dakota, South Dakota, Missouri, and Nebraska. The company also reported a capital structure with both common and preferred equity outstanding and a shareholder base that included growers. The plant had been idle for more than two years before the company acquired it in December 2021, and filings noted that a portion of the workforce displaced by the prior owner's 2019 shutdown later became employees of the debtor.
Local reporting said the company hoped to build the plant up to 500 employees but was operating at around 150 before the bankruptcy filing. The same reporting said the company notified Iowa officials on September 30, 2024 that it could not afford feed, and the plant stopped processing on October 2, 2024. The closure led to layoffs for production workers and supply disruptions for growers whose birds no longer had a processing outlet.
A local television report said the company owed Charles City about $500,000 in unpaid utility bills, a figure city leaders said represented about three months of charges. That liability sat outside the bankruptcy case after dismissal.
Animal welfare fallout and state response
The plant shutdown left broiler chickens without a processing outlet. The Iowa Department of Agriculture confirmed that depopulation began on October 17, 2024 and involved about 1.3 million birds across 13 farms, using methods consistent with American Veterinary Medical Association guidelines. A Fox 9 report said nearly 50 farmers were affected and more than two million chickens were left without feed or processing options after the shutdown.
The Charles City Press reported that the state eventually culled more than one million broiler chickens and linked delays to legal roadblocks connected to the closure. Once the plant stopped, the supply chain could not re-route production for birds already in the production cycle, leading to depopulation on farms contracted to supply the company's branded program.
The Iowa Department of Agriculture and Land Stewardship reported incurring over $2.3 million in costs to care for and depopulate the birds. Iowa Secretary of Agriculture Mike Naig cited that figure in February 2025 appropriations testimony and said the state was pursuing legislative changes to address clean-title issues for livestock in future insolvency events.
Public funding scrutiny and political response
The bankruptcy and plant closure drew scrutiny because the company received federal support intended to expand domestic processing capacity. Representative Derrick Van Orden said in a press release that the company received $45.6 million in USDA-backed funding and called for accountability after the bankruptcy filing.
The Iowa Capital Dispatch reported that lawmakers from Iowa, Minnesota, and Wisconsin sent a letter to USDA raising concerns about oversight of the funding, with Senator Chuck Grassley quoted as saying USDA "dropped the ball." lawmakers' letter The company's USDA-backed loan and grant were designed to support plant refurbishment and expansion, and the questions focused on how quickly the company moved from receiving federal support to entering a short-lived bankruptcy.
USDA Secretary Tom Vilsack later defended the agency's investment and said the program was meant to increase competition in meat processing.
Senator Tammy Baldwin also called on USDA to provide financial assistance to the contract growers affected by the plant closure, broadening the congressional response beyond the Republican oversight inquiry.
The case prompted direct legislative action in Iowa. In May 2025, the Iowa House passed a bill updating the state's grain indemnity fund and granting the Department of Agriculture authority to obtain clean title to livestock during future agricultural insolvencies. Lawmakers cited Pure Prairie as the case that exposed gaps in Iowa's existing framework for handling distressed poultry operations.
Asset disposition after dismissal
Because the chapter 11 case was dismissed, asset disposition moved to state-court processes. The Charles City Press reported that in May 2025 a Minnesota court approved a sale of the company's assets to secured creditors via credit bids, including a $25.7 million bid from Community Bank & Trust and a $2.1 million bid from shareholder Michael Helgeson for certain personal property. The report said the plant remained closed after the sale.
Before the Minnesota court approved the credit-bid sale, the debtor had executed an assignment for the benefit of creditors, a state-law insolvency process that transferred estate control to a third-party assignee outside the bankruptcy court. Creditors then filed an involuntary chapter 7 petition against Pure Prairie. Community Bank & Trust moved to dismiss the involuntary case, arguing the debtor qualified as a farmer under Bankruptcy Code section 303 and was ineligible for involuntary bankruptcy proceedings, or alternatively that the court should lift the automatic stay to allow the ABC to proceed. A law firm analysis identified the case as an example of the procedural issues that arise when an involuntary filing follows an ABC.
By March 2026, Wisconsin's Buffalo County Circuit Court entered a default judgment against Pure Prairie on 30 counts of animal mistreatment and ordered the company to pay $13,575 in fines. Collection remained uncertain given the company's dissolution and insolvency.
The reported transaction was a creditor credit-bid sale after dismissal, not a chapter 11 sale order or bankruptcy-court auction, and it did not restart production at the Charles City plant.
Frequently Asked Questions
Why was the chapter 11 case dismissed after one week?
The debtor said in the expedited motion to dismiss that it could not obtain the priming liens required for its proposed DIP financing and lacked liquidity to keep operating or maintain insurance coverage. Secured lender objections to the DIP motion prompted the debtor to seek dismissal on September 25, 2024, and the court granted the request on September 27, 2024.
Was any DIP financing approved?
No. The debtor proposed a $15 million postpetition financing facility from Sandton Capital Solutions Master Fund VI, LP in its cash collateral and DIP motion, but the court did not approve the DIP because the required priming liens were not obtained.
How many chickens were euthanized following the shutdown?
Public statements and reporting said the company received $45.6 million in USDA-backed funding, including a loan guarantee and a grant tied to federal programs aimed at expanding meat processing capacity.
What happened to the assets after dismissal?
A Minnesota court approved a 2025 credit-bid sale of the company's assets to secured creditors, including a $25.7 million bid by Community Bank & Trust and a $2.1 million bid by Michael Helgeson for certain personal property.
Who is the claims agent for Pure Prairie Poultry?
Epiq Corporate Restructuring, LLC served as the claims and noticing agent, as described in the retention application. The case was dismissed on September 27, 2024, before a bar date order or claims administration schedule was entered.
Read more ElevenFlo chapter 11 case research on the ElevenFlo blog.
Sources
dismissal order /documents/46034b25-a76e-491a-8dd5-f15ccc99fc6b/
$15 million DIP facility /documents/a084c836-08c0-4d7e-8db4-f40024fc42d2/
filed for chapter 11 https://www.meatpoultry.com/articles/30841-pure-prairie-begins-chapter-11-bankruptcy
asked to dismiss the case https://www.wattagnet.com/regions/north-america/article/15704970/pure-prairie-poultry-chapter-11-petition-dismissed
ceased processing on October 2, 2024 https://www.charlescitypress.com/front/2024/10/05/pure-prairie-poultry-chicken-processing-plant-in-charles-city-has-closed/
updates on depopulation efforts https://iowaagriculture.gov/news/pure-prairie-poultry-update-Oct-25
federal scrutiny of the USDA funding https://vanorden.house.gov/media/press-releases/van-orden-demands-accountability-usda-following-pure-prairie-poultry
questions from lawmakers https://iowacapitaldispatch.com/briefs/gop-lawmakers-demand-usda-responses-to-pure-prairie-poultry-situation/
about $500,000 in unpaid utility bills https://www.kaaltv.com/news/charles-city-leaders-open-up-about-problems-caused-by-pure-prairie-poultry/
culled more than one million broiler chickens https://www.charlescitypress.com/front/2024/10/26/state-culls-over-a-million-broiler-chickens-following-legal-roadblocks-connected-with-pure-prairie-poultry-closure/
incurring over $2.3 million https://mccmeetingspublic.blob.core.usgovcloudapi.net/iowasttres-meet-d1d6945b1111483c874addd59bce3741/ITEM-Attachment-001-12098c5aaf544c8bb208f988b99859cb.pdf
February 2025 appropriations testimony https://www.agriculture.com/naig-talks-choose-iowa-and-conservation-successes-at-appropriations-subcommittee-8785467
defended the agency's investment https://www.farmersadvance.com/story/news/2024/11/05/vilsack-defends-usda-investment-in-now-bankrupt-pure-prairie-poultry/76050629007/
called on USDA https://www.news8000.com/news/regional/sen-tammy-baldwin-calls-on-usda-to-aid-farmers-after-poultry-plant-closure/article_89dbb44a-8be2-11ef-b63f-2bc69f2d6909.html
updating the state's grain indemnity fund https://www.thegazette.com/agriculture/iowa-house-passes-bill-updating-grain-indemnity-program-which-grew-out-of-the-farm-crisis/
approved a sale of the company's assets https://www.charlescitypress.com/front/2025/06/12/bank-investor-take-ownership-of-pure-prairie-poultry-assets-under-minnesota-court-order/
$13,575 in fines https://www.jsonline.com/story/money/business/2026/03/04/pure-prairie-poultry-convicted-of-mistreatment-starving-chickens/88966902007/
This article was researched and written with AI assistance, using court filings, public records, and news sources. AI-generated content can contain errors. Verify all information against primary sources before relying on it. This is not legal or financial advice. See the disclaimer.