Business News

Court Confirms Pierre Foods Plan of Reorganization

Friday 12. December 2008 - Oaktree Capital Management to Become Majority Owner; Company Expects to Emerge From Chapter 11 Very Shortly

Pierre Foods, Inc. (the “Company” or “Pierre”) today announced that the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) confirmed the Company’s plan of reorganization (the “Plan”). With the Bankruptcy Court’s approval of the Plan, funds managed by Oaktree Capital Management L.P. (collectively, “Oaktree”), Pierre’s single largest creditor and provider of the Company’s debtor-in-possession (DIP) credit facility, have become the majority owner of Pierre. The Court also authorized the Company to emerge from bankruptcy immediately, waiving the 10-day statutory stay period, as all parties agreed to a fully consensual confirmation. The Company currently expects to emerge from Chapter 11 within the next few days.

The Company stated: “Pierre Foods is poised to emerge with the renewed ability to operate profitably throughout the continued downturn of the economic cycle and beyond. We are pleased to continue working with Oaktree and appreciate their continued commitment to the Company. Oaktree and its affiliates have extensive experience in alternative investments and a proven track record of success through superior performance. We are excited about this new sponsorship and believe that Oaktree is the perfect partner to help guide the future of the Company. Additionally, we are grateful for the loyalty of all our dedicated employees, customers and vendors during this restructuring. We look forward to our continuing relationship with these parties who played a critical role in our successful restructuring.”

As previously announced, the Plan provides for the following:

— A portion of the existing prepetition secured indebtedness will be
satisfied in cash;
— Conversion of $85 million of existing prepetition secured indebtedness
to a new mezzanine facility;
— Conversion of the remainder of the existing prepetition secured
indebtedness to 100% of the equity of Reorganized Pierre;
— A new exit facility in the amount of $95 million to fund the Company’s
ongoing operations and pay obligations under the Plan. The Company
expects less than $60 million to be drawn at exit;
— the Debtors’ Senior Subordinated Notes in the principal amount of $125
million will be cancelled; and
— 12% cash recovery for unsecured creditors (including holders of Senior
Subordinated Notes).