Pierre Foods receives notice of default, payment blockage notice on July 15 noteholder payment

By Jennifer Lanning Drey

Portland, Ore., July 11 - Pierre Foods, Inc. received notice of an event of default from Wachovia Bank, NA for non-payment of interest due June 30, according to an 8-K filed with the Securities and Exchange Commission.

Wachovia is the administrative agent under a June 30, 2004 credit agreement with Pierre Merger Corp. and Pierre Foods.

As a result of the event of default, on July 8, Wachovia delivered a payment blockage notice to Pierre and U.S. Bank NA as trustee. The notice prohibits Pierre from making any payment or distribution of any of its assets on account of the obligations related to its senior subordinated notes issued under the June 30, 2004 indenture or on account of the purchase, redemption or other acquisition of the notes, including payment to noteholders scheduled for July 15.

The lenders under the credit agreement have not accelerated the indebtedness, and the company said it continues to actively pursue and consider various strategic and restructuring alternatives.

Pierre is a Cincinnati-based manufacturer, marketer and distributor of differentiated food products, focusing on pre-cooked and ready-to-cook protein products, compartmentalized meals, and hand-held convenience sandwiches

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