The French poultry group Doux collapsed into administration after failing to reach an agreement with bankers, putting at risk more than 3000 jobs.
Doux, one of the world's largest poultry exporters, confirmed that a judicial administrator had been selected who would help the company's management to draw up a plan to keep operating in France; that would support jobs and the survival of the company.
The company added that the Doux Group would immediately put together a plan to help strategic suppliers and breeders to avoid any difficulty.
Doux was placed in administration by a commercial court in Quimper, northwest France, after saying that it had suspended payments to creditors. The company has said previously its debt of 340m € includes 200m € in Brazil, where it bought subsidiary Frangosul in 1998, and 140m € owed to the Barclays Bank.
The government, which had offered a 35m € cash injection for the company, blamed owner Charles Doux for ending negotiations to save the firm, but vowed to continue working to find solutions. Agriculture Minister Stephane Le Foll has said it would go to great lengths to prevent Doux Group's bankruptcy and protect farmers put at risk.
In addition to employing 3400 staff in France, Doux also has supply contracts with some 800 poultry breeders. Doux is also the largest beneficiary of European Union farm aid in France, with 55m € in the year to October 15, 2011, due to export subsidies.
Court protection may allow the company to try to convince Barclays Bank to transform some or all of the poultry maker's debt into an equity stake. The court procedure could also enable Doux to absolve the French parent company of responsibility for its Brazilian unit's debts. Frangosul accounted for nearly half of Doux's sales of 1.4bn € in 2010.
Doux is 80% owned by Charles Doux, its founder.