Documents: Beef plant owes millions

Farm Forum

Northern Beef Packers owes money to 277 unsecured creditors, including more than $1 million to a prime investor, according to documents filed in federal bankruptcy court.

Two new mechanics liens, both modest, have also been filed against the beef processing plant south of Aberdeen.

According to bankruptcy court documents, Northern Beef Packers has estimated assets of more than $50 million, but less than $100 million, and estimated liabilities of between $10 million and $50 million.

The largest unsecured creditor is Oshik Song, general partner, to whom $1.04 million is owed, according to bankruptcy paperwork.

The plant also owes $1.03 million to Hanul Law of Santa Ana, Calif.; $903,028 to the U.S. Treasury for payroll taxes and $182,263 to the City of Aberdeen for utility bills, according to the court documents.

Unsecured creditors don’t have any security or collateral – anything to foreclose on or repossess. So they have to, in essence, line up and hope they will eventually be paid.

According to a voluntary petition of bankruptcy filed by the plant, it “estimated that after any exempt property is excluded and administrative expenses are paid, there will be no funds available for distribution to unsecured creditors.”

The nature of the debts is “primarily business related,” according to the petition.

Under federal law, when a person or business files for bankruptcy:

·Creditors cannot try to collect debts until a bankruptcy judge grants them permission.

·Pending legal action is halted until the bankruptcy court allows it to proceed.

Northern Beef Packers is involved in an unresolved civil lawsuit with a Huron contractor, Scott Olson Digging, which filed a $2.1 million mechanics lien against Northern Beef Packers. The plant has sued the contractor, claiming it overpaid and was overcharged for dirtwork at the plant site. Scott Olson Digging then countersued the beef plant.

Previously, the plant had resolved dozens of other mechanics liens that had been filed against it.

The two new mechanics liens against the beef plant are from recent months. One, for $4,300, was filed earlier this month by Climate Makers of Hastings, Minn. It is for labor and materials related to repairing a boiler, according to lien paperwork filed at the Brown County Register of Deeds Office. The other, for $2,819, was filed in May by Diamond Vogel Paints of Aberdeen. It’s for labor, services, material or machinery furnished, according to the lien.

The plant is also delinquent in paying its property taxes. According to the Brown County Treasurer’s Office, it owes roughly $500,000 on eight parcels of property. That money was due at the end of April.

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