Beef Plant files lawsuits against three creditors
Northern Beef Packers has filed lawsuits against three businesses in an attempt to get back money paid to the creditors.
The cases, legally called adversary complaints, are part of the beef plant’s larger bankruptcy case. They seek the return of money transferred in the 90 days before Northern Beef declared Chapter 11 bankruptcy in July 2013.
Simply put, the case allowed the creditors to collect more money than was necessary under federal bankruptcy law, according to court paperwork.
In Chapter 11 bankruptcy, a business is allowed to work with creditors and reorganize its debt, then continue to operate. In Chapter 7 bankruptcy, debt is more likely to be forgiven because the sale of assets might not cover all that is owed.
The defendants in the three cases and the amounts sought include:
• Avera Health Plans Inc.: Six payments, totaling $349,578.
• NorthWestern Energy: Five payments, totaling $277,403.
• Qvest LLC: Seven payments totaling $145,000. Qvest, an Oklahoma company, provided sanitation services to the beef plant.
Federal bankruptcy law allows for recovery of the payments, according to the lawsuits. They ask that the transfers, plus interest and other costs, be repaid to Northern Beef.
At a bankruptcy auction in December, White Oak Global Advisors, a San Francisco-based investment firm that lent tens of millions of dollars to Northern Beef, submitted a $44.35 million cash and credit bid to buy the plant. It included $39.5 million in credit and $4.8 million in cash to satisfy liens.
Since then, Northern Beef has been renamed New Angus, and the new ownership group is moving toward reopening the plant.
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