Attorneys request $12.75M as starting bid for beef plant

Farm Forum

Attorneys are requesting that not less than $12.75 million be set as the starting price for bidding at the auction of the Northern Beef Packers plant scheduled for Dec. 5.

Beef plant attorneys filed a motion in U.S. Bankruptcy Court in Sioux Falls on Wednesday to establish bidding procedures for the auction of the plant. Under the proposal, bids would be solicited for all of the beef plant’s property, including fixtures, improvements, machinery, equipment and supplies.

“Given the unique nature of the operating assets, it is impossible to estimate the value of the operating assets with certainty,” the motion reads. “The proposed minimum purchase price represents an amount determined by the debtor’s professionals based on market information and recent bids as an appropriate level to promote broad participation in a competitive auction for the assets.”

Northern Beef had spent about $115 million on the plant and equipment.

The value of the plant and land assessed for tax purposes is about $54 million, said Mary Worlie, Brown County director of equalization.

The assessed value for tax purposes is typically less than the market value of property, but the beef plant is not a typical property, Worlie said.

“This is a very unique situation,” she said. “We don’t know what it will bring at auction. It will sell for what it sells for.”

The motion filed by Northern Beef’s law firms, Cozen O’Connor of Minneapolis and Bantz, Gosch and Cremer of Aberdeen, also seeks a sale order. That would approve the sale of the operating assets to the party which has submitted the highest and best offer through the bidding procedures and auction.

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