‘Super Chicken’ Venture Sold Out of Bankruptcy

Chickens roaming on Cooks Venture’s 800-acre farm in Decatur a few years ago. The slow-growth birds were prized for their superior taste, the company said. (Provided)

Cooks Venture Inc. launched in 2018 with big names in the food industry, slow-growth chickens and Earth-friendly ideals.

The northwest Arkansas producer of free-range poultry had some advantages: the Peterson family’s Crystal Lake Farms in Decatur (Benton County), sturdy genetics from decades of Peterson breeding work and many millions of dollars from investors betting on the good taste of the company’s “super chickens.”

But the company met its end on May 9, when a California poultry producer bought most of the assets of Cooks Venture and related entities out of bankruptcy for $7.1 million.

U.S. Bankruptcy Court Judge Karen Owens in the District of Delaware approved the sale of Cooks Venture’s assets to Bel’s Poultry LLC of Sanger, California. Bel’s Poultry is affiliated with Pitman Farms, the producer of Mary’s Free-Range Chickens.

The bankruptcy sale capped the fall of Cooks Venture, which touted its mission to build a better food system and liked to show off pictures of its Pioneer breed chickens foraging widely over the Decatur acreage.

Blue Apron meal service co-founder Matthew Wadiak added celebrity splash to Cooks Venture’s debut, and he led the company as CEO for four years, describing its birds as “sort of the Olympic athletes of poultry.”

Cooks Venture’s executive vice president was Blake Evans, the grandson of Arkansas poultry genetics pioneer Lloyd E. Peterson and the last president of Peterson Farms before its broiler operations were sold to Simmons Foods of Siloam Springs in 2008.

The company abruptly halted most operations in November, just three months after Cargill Inc. veteran John Niemann was named Wadiak’s successor as CEO. Niemann resigned on Nov. 17 after holding the job for 92 days. Reached by text message, he directed questions about the bankruptcy case to Evans.

Evans did not return messages left on his cellphone.

‘The Wrong Guy’

Wadiak told Arkansas Business that after leaving as CEO last year, he knew nothing about the bankruptcy case or the sale plans. “I have no idea what’s going on,” he said in a brief telephone interview.

“You’re talking to the wrong guy. I get these calls because my name was associated with the company from earlier. But I have nothing to do with any of that.”

The company started growing premium slow-growth chickens in Decatur in August 2019, relying on Evans’ hatcheries and poultry houses. It also had a production facility in Jay, Oklahoma, that was processing 40,000 chickens a week by the end of 2019.

But the company never attained profitability. And through the pandemic and the inflation that followed, even industry titans like Tyson Foods of Springdale struggled. As one attorney put it in the Cooks Venture bankruptcy proceedings, “I must confess, there’s gotta be an easier way to make a living” than raising poultry.

Cooks Venture, which had more than 500 workers in Arkansas and Oklahoma, finished its run nearly $75 million in debt.

The company sent a letter dated Nov. 17, 2023, to the Oklahoma Office of Workforce Development giving notice that it would close all its facilities “between November 20, 2023 and November 30, 2023, which shutdown and closure would affect all of the Company’s employees.”

In December, state Sen. Bryan King, R-Green Forest, appealed for a state emergency declaration to help Arkansas chicken producers who had been growing for Cooks Venture and were left with flocks the company lacked money to feed, transport or euthanize. “This matter significantly affects poultry growers, involves serious animal welfare and disease concerns and creates environmental issues. The impact of the volume of decaying birds to be disposed of is an economic nightmare and it should not be the burden of the growers.”

King asked the state to provide “full compensation” to growers, feed suppliers and other entities.

But no state rescue arrived. State Agriculture Secretary Wes Ward explained in a response to King. “Because the proper role of government does not include state assumption of private debts, your request has been respectfully declined,” Ward wrote. He called poultry a vital industry in northwest Arkansas. “However your request that the government ‘provide full compensation’ to ‘any entity related [to the closing of Cooks Venture Inc.]’ goes beyond the scope of appropriate state action.”

The exchange foreshadowed an issue in the bankruptcy case and a ruling that saved 100,000 heritage breed birds from starvation and cannibalization.

Saving the Animals

Cooks Venture Inc., Cooks Venture Poultry Inc. and Cooks Venture Poultry Jay Inc. all filed for Chapter 7 bankruptcy liquidation on April 19. Cooks Venture owns Cooks Venture Poultry Inc., a poultry processing company founded in 2018, according to bankruptcy filings. Cooks Venture also owns 15% of Cooks Venture Poultry Jay Inc., a poultry processing business founded in 2018. The remaining 85% is owned by Wadiak.

Bel’s Poultry LLC offered the highest bid for Cooks Venture’s assets, court filings say, and it agreed to buy basically all of Cooks Venture’s assets, including the live poultry stock of Pioneer breed chickens.

David Pitman, the manager of Bel’s Poultry, didn’t return calls from Arkansas Business.

After the bankruptcy cases were filed, the appointed trustee, Alfred T. Giuliano of Voorhees, New Jersey, “started to scramble in earnest to deal with the cases,” his lawyer, John T. Carroll III, said in a bankruptcy hearing last month.

About 100,000 chickens had to be dealt with or they would die.

In an unusual move, Carroll asked the bankruptcy court for approval to continue to operate the company to save the chickens.

“In the chicken industry, as I understand it, the chickens will start to cannibalize one another if they’re not fed within a day or two,” Carroll said at the proceeding. “There have been arrangements put in place to maintain employees so that the chickens can be maintained in good shape and so that we can get hopefully through the sale process.”

Without provisions to feed the chickens, the trustee would be forced to euthanize them, costing the company thousands of dollars.

“This would also terminate the parent breeding stock for the Pioneer breed of chicken, which is a product of over fifteen years of research and development, and the jobs associated with it,” the filing said.

On April 24, Judge Owens approved the continued operation of Cooks Venture to feed the chickens.

“Although I must confess, there’s gotta be an easier way to make a living than dealing with the chickens,” Carroll told Owens at another bankruptcy proceeding on April 25.

Road to Bankruptcy

The Cooks Venture companies were “a vertically integrated poultry company focused on regenerative farming practices in Decatur, … where they raise their own proprietary Pioneer breed of heritage chicken,” according to an April 22 bankruptcy filing by Carroll, of the Cozen O’Connor law firm of Wilmington, Delaware.

The first public signs of trouble at the Cooks Venture companies came in February 2023, when Southeast Poultry Inc. of Rogers sued Cooks Venture Poultry Inc. in Benton County Circuit Court for $65,000.

Southeast Poultry alleged that between Nov. 21, 2022, and Dec. 27, 2022, it provided meat processing services to Cooks Venture Poultry but wasn’t paid.

Cooks Venture Poultry denied the allegations. The case was settled  and dismissed in May 2023.

Cook Venture’s gross revenue fell in 2023 to $46.4 million from $50.2 million in 2022.

Most of the revenue came from sales of its chicken to national grocery stores chains such as Trader Joe’s and Whole Foods Market.

Cooks also sold its poultry and beef and pork sourced from third parties through a direct-to-consumer website, Carroll’s filing said.

Cooks had an in-house poultry pedigree research and development program to refine and improve the Pioneer breed, and the company kept that project going after it shut down other operations in November. Cooks claims the Pioneer breed delivered a better taste than meat grown by the large chicken companies.

But in 2023, the Cooks companies “were continuing to incur operating losses” and needed to raise money.

Cooks CA LLC, an entity related to Cleveland Avenue of Chicago, a fund that provides financing and investments to companies, provided money to Cooks Venture.

Cooks Venture Inc. Private Placement Offerings

Source: Securities & Exchange Commission Form Ds and amendments. Researched by Gwen Moritz

“During the last six months the company went through some pretty significant financial difficulties, at which point a request was made to our clients, and I believe another fund to provide some interim financing along the way,” Jason DeJonker of Chicago, an attorney who represents Cooks CA, said during a bankruptcy hearing.

Cooks Venture borrowed $1 million from Cooks CA on Nov. 17 and then another $500,000 on Nov. 28.

But the money wasn’t enough.

Cooks Venture worked with investment banker Harrison Co. of Salt Lake City to raise capital, Carroll said in the filing. “However, the capital raise was unsuccessful, so the Debtors began the process of preserving assets for a potential sale of their business.”

Cooks Venture’s board decided to hire Accordion Partners of New York, a financial adviser with offices across the country, to help sell the company.

Accordion and one of the Cooks Venture’s executives attended the International Production & Processing Expo, a large poultry industry conference in Atlanta, on Jan. 30, to market the company, Carroll said in the filing.

List of Cooks Venture Inc.’s Equity Interest Holders

Source: Cooks Venture bankruptcy filing

Seeking Buyers

Cooks Venture told the appointed trustee, Giuliano, that before it filed for bankruptcy, it “engaged in multiple rounds of comprehensive marketing to generate interest in a sale of substantially all of their assets, ultimately creating a list of 115 potential buyers.” Of those potential buyers, 35 signed nondisclosure agreements.

In March, Bel’s Poultry began negotiating with Cooks Venture.

And on April 19, the day the Cooks Venture companies filed for bankruptcy, Bel’s Poultry entered into a purchase agreement to buy substantially all of the Cooks Venture assets for $7.1 million.

Bel’s Poultry also agreed to pay obligations to breeders for current flocks, Carroll said in a proceeding.

“That purchase agreement has provisions within it that if closing does not occur by May 10, then there are reductions in the purchase price by $250,000 per week,” Carroll said during a bankruptcy proceeding on April 23.

The Cooks Venture bankruptcy cases are pending.