FAYETTEVILLE, ARK. – A group of poultry growers is suing executives of Cooks Venture, accusing them of using deception to recruit growers into contracts and failing to disclose the company’s financial condition. Cooks Venture filed for Chapter 7 bankruptcy protection in April.

Thirteen plaintiffs are listed on the complaint with Cooks Venture founders Matthew Wadiak and Blake Evans, John Niemann, chief executive officer, and Tim Singleton, chief operating officer, named as defendants.

Blake Evans and Matt Wadiak, co-founder of the meal kit company, Blue Apron, founded Cooks Venture to sell a proprietary breed of chickens directly to consumers online, through retail outlets and to foodservice operators at prices comparable to competing mid- to high-attribute birds currently on the market. The plaintiffs alleged that Cooks Venture “cultivated an image as a progressive, farmer-friendly integrator with strong management.”

The reality, according to the court document, was quite the opposite.

“Cooks Venture was an undercapitalized startup whose principal officers recklessly chased scale over sustainability — and landed their enterprise in bankruptcy,” the complaint said.

Representatives of the company never made clear that Cooks Venture could not fund operations from current revenues and depended on infusions of capital and extensions of credit to stay in business.

And the company did secure infusions of funding. In February 2022, the company announced $50 million in funding from technology company PIUS. And in August of 2020, Cooks Venture and Golden West Food Group netted $10 million in Series A funding. Golden West Food Group led a $4 million funding round in January of the same year to help Cooks Venture expand distribution of its heirloom chickens.

The complaint states that Cooks Venture generated revenues of $10 to $20 million per year when the company launched in 2019. With those returns, Wadiak and Evans could have grown the company incrementally by operating a smaller processing plant in Tahlequah, Okla., and delaying use of a larger processing plant in Jay, Okla. But Wadiak and Evans chose not to pursue that strategy.

“Right out of the gate, they set a goal for Cooks Venture to slaughter 100,000 birds per week before the summer of 2019 was out — and from there rapidly scale output up to 700,000 birds per week within two years,” according to the complaint.

Without adequate capital to achieve their goal, Cooks Venture turned to outsourcing chicken growing to contract farmers which enabled the company to “avoid many of the capital requirements and risks of loss involved in expanding its broiler production capacity to the scale Mr. Wadiak and Mr. Evans desired,” the complaint state.

Facing stiff competition from larger meat processors such as Tyson, Simmons, Butterball and others for poultry growers in the Ozarks region, the lawsuit alleged that Wadiak and Evans deployed a “dishonest recruitment program that induced target farmers to make capital investments in broiler houses and sign Cooks Venture’s standard-form poultry growing contract — styled the “Regenerative Agriculture Poultry Production Agreement” — through systematic deception about the material terms of that contract, the economic returns the farmers could receive from entering such a contract with Cooks Venture, and Cooks Venture’s financial strength and ability to fulfill its obligations to growers…”

Even as the company’s financial condition deteriorated, the lawsuit alleged Singleton, Wadiak and Evans hid the truth from the public in order to secure infusions of capital from investors and maintain the confidence of material and service suppliers, including the poultry growers.

This deception prevented the growers and others from protecting themselves against the prospect of Cooks Venture’s failure, according to the complaint.

Cooks Venture closed its operations in Oklahoma and Arkansas in November of 2023. A letter to employees stated:

“While we would have preferred to provide you with more notice, due to the unexpected and last-minute lack of financing for the company’s continued operations, we were unable to do so. The company has, since at least as early as Sept. 1, 2023, been engaged in serious discussions with investors to obtain financing which, if obtained, would have enabled the company to avoid a shutdown and continue its operations. Unfortunately, earlier this week we learned that the company would not be able to obtain the anticipated financing.”

Arkansas Senator Bryan King, appealed to Governor Sarah Huckabee Sanders for a state of emergency following the closure of Cooks Venture, which left roughly 500 people suddenly unemployed. The Arkansas Department of Agriculture denied King’s request.