This audio is generated automatically. Please let me know if you have any comments.
Diving overview:
-
13 former poultry farmers Sue Cooks Venture’s leadership has been accused of engaging in deceptive and illegal conduct, saying it caused hundreds of thousands of dollars in losses to a now-shuttered “next generation” chicken company that claimed to support sustainability and farmer welfare.
-
The complaint, filed last week in the U.S. District Court for the Western District of Arkansas, alleges that former Cooks executives Matthew Wadiak, John Niemann, Blake Evans and Tim Singleton continued to mislead contract chicken growers, turning the company into “a de facto Ponzi scheme.”
-
The chefs reportedly convinced dozens of Ozark chicken growers to mortgage their farms and homes, buy and prepare large broiler coops, and stand by until the company suddenly closed in late 2023. The growers are demanding compensation and compensation for unpaid services.
Dive Insights:
The lawsuit is one of the first to challenge the company’s recently updated practices. Packers and Stockyards Act May includes protection against false or misleading statements or omissions of information when entering into, performing and terminating a contract.
“It is important that we hold those behind Cooks Venture accountable in court. control of large agricultural enterprises; David Muraskin, FarmSTAND’s director of litigation and lead counsel for the plaintiffs, said in a statement.
Court documents say executives burned through capital at a breakneck pace to grow the startup into a leader in heirloom, grass-fed chicken. The lawsuit alleges that the company conducted an aggressive recruiting campaign to persuade growers to invest up to hundreds of thousands of dollars in farm assets and sign three-year contracts that they could not fulfill.
Despite internal financial problems, the plaintiffs say Cooks continued to recruit and grow its network of farmers in the months leading up to its sudden closure in November 2023. Contract poultry farmers were raising more than a million birds for Cooks when production ended.
Instead of finding another buyer for the remaining flock, the Arkansas Livestock and Poultry Commission It was agreed to euthanize the birds.Citing animal welfare and avian influenza issues, chefs are responsible for cleaning up the mess. But in many cases, farmers were left to dispose of dead birds themselves within weeks of their contracts expiring.
Last April, Cooks filed for Chapter 7 bankruptcy. Bel’s Poultry, owned by California-based Pitman Farms, acquired the production assets the following month.
The contract poultry growers are represented by antitrust attorneys, FarmSTAND, Law Offices of Brad Hendricks, and TFPC.
“We need to make an example of every company that falsely claims to be doing things the right way to provide a better food system for farmers, animals and consumers,” Muraskin said.
Neither Pitman Farms nor Cooks’ former CEO immediately responded to Agriculture Dive’s request for comment.
