Source: Tom Johnston, MEATINGPLACE, 9/15/11

A federal bankruptcy judge granted a motion Wednesday allowing Townsends Inc. to abandon the company’s efforts to restructure under Chapter 11 and enter Chapter 7 liquidation, according to court documents.

The Georgetown, Del.-based poultry processor filed for bankruptcy under Chapter 11 in December 2010 and has since sold of most of its assets to Peco Foods and Omtron Ltd.

Townsends said in a motion filed Aug. 26 it could no longer afford the restructuring process.

“In addition to the lack of assets in the estate, there are insufficient funds available to make funding a plan process a worthwhile endeavor,” the company said in the motion.

Townsends succumbed to record-high feed prices and low chicken pricing, a trend challenging the entire poultry industry. Also on Wednesday, Butterball LLC announced plans to shutter a turkey plant, citing similar factors.

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