A U.S. trustee recently filed a petition asking a judge to liquidate a beef processing plant that is in the process of filing for bankruptcy. In July 2013, Northern Beef Packers in South Dakota filed for bankruptcy under Chapter 11; the company now hopes to be granted Chapter 7 liquidation.
Businesses in all states, including Arizona, may file for bankruptcy or liquidation under federal bankruptcy laws. The trustee of the beef processing plant told a federal court that the Aberdeen-based company is administratively insolvent and that the only way that funds could be generated to pay off creditors would be to liquidate the assets of the plant. The land for the $109 million processing plant was secured in 2006, but the company went six years before it was able to slaughter its first animal. The company has continued to have problems meeting its production goal of slaughtering 1,500 animals per day. The plant has also been facing lawsuits and flooding, in addition to other financial problems.
Northern Beef executives have spent months searching for a buyer or additional investors in an attempt to purchase more cattle and turn a profit. The plant, once locally owned, is now predominantly owned by Korean investors, who contributed money through a federal program meant to encourage foreign investment in exchange for the investors’ ability to obtain permanent residency. The plant was originally established in response to the former South Dakota governor’s Certified Beef Initiative.
Filing for bankruptcy may be a way for businesses to protect the interests of creditors and to prevent further delays and loan defaults. An attorney specializing in bankruptcy law may be able to help a company file a timely petition for bankruptcy or for liquidation of the company’s assets.
Source: ABC News, “Trustee wants Chapter 7 bankruptcy for beef plant”, Dirk Lammers, August 28, 2013