'Roller coaster' circumstances ruined egg farm
By CHASE SQUIRES, Times Staff Writer
CLEARWATER -- With hundreds of thousands of chickens dead at a Trilby farm and under pressure from animal rights activists, Chief Assistant State Attorney Bruce Bartlett summed up the five-month investigation for his boss, State Attorney Bernie McCabe.
"I don't see us pressing animal cruelty charges," he jotted in pen on a square sheet of notepaper. "There is a lot more to this than the animal groups reported."
A file 6 inches thick released this week details the 40-year rise -- and the six-month free fall -- of Cypress Foods.
It's a story of bad times and bad timing.
The investigation began March 5 when an animal rights activist called the Pasco County Sheriff's Office to report chickens were starving at the 80-acre Cypress Foods farm off U.S. 98 in Trilby. State and local investigators found at least 2,000 chickens dead and up to 200,000 starving. The dead were buried; the others were euthanized.
The investigation that followed uncovered a string of circumstances that brought the farm to ruin.
Owner Jim Renard Biggers told a Polk County court last year that he and a wealthy coworker started Cypress Foods, which grew to include egg farms in Alabama, Georgia and Trilby, in 1960, after years in the feed business together.
It started to unravel Sept. 15, 2001, Biggers told the court. That's when First Union bank ran out of patience after years of declining egg prices and snapped $150,000 from Cypress accounts to pay overdue debts, then sued him.
At the time, the bank held $7-million in unsecured loans to the company. By the time a Polk County judge appointed a receiver in December, evidence showed a company that once had a net worth of $16-million was bleeding money and had a negative net worth of $783,000.
After more than 40 years, the debts surpassed the value of everything the company owned.
The company was worse than worthless, and hemorrhaging money to boot.
Trouble had been brewing for years, records show. In 1996, farmers were getting 66.5 cents for a dozen eggs. By February of this year, a month before money for food at the Trilby henhouse dried up, Cypress Foods -- forced to sell on a swamped spot market -- was getting 32 cents a dozen.
Industry group United Egg Producers last year warned members there was too much production and more bad times were ahead, with 21-million more egg-laying hens expected in 2002 than there were in 2000.
The report, urging voluntary reductions, was titled "Crisis. How long can you take it?"
For Cypress Foods, the answer was: not much longer.
The company was losing $207,506 a week when it ground to a halt, a company cash flow analysis showed.
Biggers told a court in December that as prices fell, his company lost $1.2-million in 1998; $5-million in 1999; $3.8-million in 2000; and by October 2001, the year's losses were at $5.4-million. A price drop from 66 cents to 42 cents a dozen meant an $8.4-million per year dip in revenue, Biggers wrote in an open letter to producers and creditors.
"It's a roller coaster. We lose millions, sometimes we make millions," Biggers told the court.
After another bad year, and after the bank went after its money, Biggers said he knew he was in trouble. Without cash, paychecks bounced. Feed producers wanted money up front. The balancing act was unbalanced.
In January, Biggers filed for bankruptcy protection to get out from under a receiver protecting First Union's stake, and the bankruptcy court restricted how much could be spent on feed. Birds were being fed once or twice a week.
Danny Strickland, who managed the Trilby farm for Biggers, told investigators he had no idea the company was in bankruptcy, but he knew the feed wasn't coming any more.
"When he didn't have any feed he would call Mr. Biggers and tell him "we need feed,' and Mr. Biggers would tell him that he was working on it," a State Attorney's Office report says. "He said that sometimes they would get something and sometimes they wouldn't."
But even in trouble, on Jan. 31 Biggers seemed upbeat. In a letter to a Cypress Foods attorney, Herbert Donica, Biggers said buyers at Professional Management Funding Inc. of Orlando were ready to pay $30-million for the company.
"The deal is very viable," Biggers wrote.
A $3-million down payment, in advance, could feed the chickens while a closing date was set, he wrote.
Donica was skeptical. In a Feb. 11 letter to Biggers, Donica warned the court would demand action on the pending sale. The deal was still unconsummated.
"I strongly urge you to consider this proposed sale contract as one lacking viability," he wrote.
Over the top of the letter, written in pen, are the words, "No money on table -- the game is over." The note is signed JRB, for Jim Renard Biggers.
This week, Donica said he had doubts all along about the buyers' backing. The buyers told investigators that First Union and the court broke up the deal.
Raymond Hamiel, an agent for the prospective buyers, sent a letter Feb. 9 saying he was working on a $4-million loan. On Feb. 18, Biggers wrote back. He still hadn't seen the money.
"I want to return to an absolutely urgent, repeat urgent, need for capital to feed all of our laying hens," Biggers wrote.
Food ran out a day later, Feb. 19.
As a result, the birds' feathers fell out.
On Feb. 28, a bankruptcy receiver was appointed and learned of the birds' plight. On March 5, the Florida Poultry Association delivered food to keep the surviving ones alive until they could be euthanized.
Throughout, Biggers said he tried to save his company and feed his chickens.
"We fight (to raise) cash from early in the morning until we go home at night," Biggers testified in court last year. "If we collectively as creditors and as owners of the remain let them birds go to pot, God help us what the loss is going to be. We've got $3-million in chicken feathers."
As the end approached, Biggers told a court he was barely hanging on.
"I've borrowed from friends and paid some of these suppliers, but I can't, you know, I can't borrow any more," he said. "I bet the ship on this company."
Investigators studying the chicken deaths were pelted by animal rights groups, who argued even if Biggers didn't try to hurt the chickens, he knew the financial end was near and should have given them away.
But Donica said no one wanted the birds. The market was bad. Who would want more chickens, when it was costing more to feed them than the eggs were fetching, Donica asked.
The investigative file includes 52 letters from across the country, protesting the chicken deaths and urging cruelty charges be filed.
People for the Ethical Treatment for Animals posted an alert on its Internet site, asking members to "politely urge" prosecutors to press charges. Tampa attorney Paul Rebein, on behalf of the group Farm Sanctuary, sent a 58-page argument for charges to McCabe, calling the deaths "the largest case of animal cruelty in the history of the United States, perhaps even the world."
But prosecutors found there was no one to blame in criminal court.
Wilton Simpson, a Pasco County egg farmer whose family sold the Trilby farm to Biggers, said the industry remains difficult. He said his farm holds on thanks to contracts with supermarket buyers that stabilize prices.
Biggers, he said, is an honorable farmer who fought the free market and got shaken out of the industry in what is a dangerous economic cycle. In even the best of times, the profit margin in egg farming is razor thin, Simpson said. When times get tough, modern farms, like his own, can weather the storm, while inefficient, and older, farms such as Biggers' are washed out.
"He is the captain who went down with his ship," Simpson said.
Donica said Cypress Foods is all but a corporate memory now. The name still exists with the Florida Secretary of State, but the assets are either sold or in the hands of the receiver, about to be sold. He said creditors must reach an agreement on who gets paid what, but Biggers is out of the picture. He will get nothing.
Biggers hasn't spoken publicly. His personal attorney, Warren Dawson, said last month he would advise against it, and calls to his Winter Haven home went unanswered. A voice mailbox for him was full.
Donica said the end to a 40-year company was the result of an economic cycle Biggers had always managed, taking advantage of good times and weathering the bad.
"He would ride the macroeconomic curve, buying on the bottom and then trimming off at the top while there was still a demand, knowing there would be a turn. This time he was the victim of an extended downturn," Donica said. "Sometimes when you've got to zig, you zag."
-- Chase Squires covers courts in east Pasco and Dade City news. He can be reached at (352) 521-5757, ext. 27, or toll free at 1-800-333-7505, ext. 6108, then 27. His e-mail address is email@example.com.
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