Judge allows South Dakota beef plant to hire banking firm
SIOUX FALLS, S.D. (AP) – A bankruptcy judge is allowing an idled South Dakota beef packing plant to employ an investment banking firm to pursue a sale.
On Sept. 16 Judge Charles Nail approved Northern Beef Packers’ hiring of Lincoln International, which will seek a ”stalking horse” bid in which one potential buyer makes an initial offer to set the floor for an auction.
Northern Beef Packers opened its $109 million state-of-the-art facility on a limited basis in 2012 after years of delays. But its owners filed for Chapter 11 bankruptcy protection less than a year later, saying they didn’t have enough money to buy cattle for slaughter.
Nail last week approved the plant’s request to borrow $512,000 to pay bills. Its request for $2.25 million in credit will be considered later this month.
Most of the $2.25 million would be used to pay utility costs, legal fees and wages of a handful of workers still at the plant, according to a proposed budget filed in the bankruptcy case. KELO Television reported that a lawyer for the plant says $1 million would be set aside after the sale of the plant for employees to claim wages and benefits.
According to court documents, here’s how Northern Beef Packers would use the $2.25 million, if approved. The numbers are for expenses between Sept. 14 and Dec. 28.
· Payroll for security workers: $99,200
· Payroll for still-employed plant workers: $261,492
· Payroll taxes: $95,740
· Building insurance and workers comp insurance: $255,953
· Health insurance: $39,964
· Allowance for higher utility deposits: $29,000
· Payment of attorneys: $405,000
· Retainer and fees for Lincoln International: $160,000
· Fees for committee’s professionals: $175,000
· Lagoon repairs: $20,000
· Various utilities: $488,801
· Total: $2,030,150
· Remaining cash on hand: $219,850