FRESNO -- The fate of poultry processor Zacky Farms is back up in the air after a Zacky family trust backed out of its bid to purchase the troubled company in a bankruptcy auction.
In court records filed Thursday with U.S. District Bankruptcy Court in Sacramento, attorneys for the company reported the Richard and Lillian Zacky Trust "decided it would not go forward with the sale at the present time."
With its bid of $31.6 million, the Zacky Trust was deemed the winning bidder for the company -- one of the largest producers and processors of turkeys in the nation -- at a bankruptcy auction last week in San Francisco. The Zacky Trust bid included provisions to keep nearly all of Zacky Farms' 1,000 or more employees, and would have kept the company in the hands of its founder's descendants.
Zacky Farms is now turning its attention to a second bidder, Sanger-based Pitman Family Farms. The Pitman company originally bid more than $22 million at the bankruptcy auction, and after the auction increased its offer to $32.1 million, according to court documents.
Attorneys for Zacky Farms reported "the Zacky Trust's unwillingness to go forward and close the sale ... requires the debtor to proceed with the Pitman backup bid."
The company accepted the Pitman bid Wednesday, court documents state.
Pitman Family Farms sells free-range poultry under the brand name Mary's Free-Range Chickens.
Zacky Farms was founded by Samuel Zacky in 1928. For years, the company produced turkeys and chickens before selling its chicken business to Foster Farms in Livingston in 2001.
Zacky Farms not only sells whole turkeys and turkey parts, but also processes and sells ground turkey and cooked turkey deli products. The company reported gross sales of about $142 million in 2010 and $146 million in 2011.
The company re-entered the chicken business in late 2011, entering a niche market to grow free-range and antibiotic-free birds.
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