Northern Beef bankruptcy ruling favors contractor

PIERRE — One of the first contractors on the Northern Beef Processors project at Aberdeen is still owed $205,104, a federal bankruptcy judge declared in a decision released Monday.

But the company might never see a penny.

U.S. Bankruptcy Judge Charles Nail Jr. decided Scott Olson Digging stands second in line for debts to be paid. At the front is Brown County, which is owed taxes.

The judge put the Huron dirt mover ahead of mortgages held by two pools of foreign investors and mortgages held by White Oak Global Advisors.

Northern Beef filed chapter 11 bankruptcy reorganization. But that might not be the permanent status.

Wrote the judge: “… the court has heard loud whispers debtor may soon seek voluntarily conversion to Chapter 7.” Chapter 7 would leave all of the remaining debts unsatisfied.

Scott Olson Digging began work at the Northern Beef site in November 2006 under the first of four agreements with the project’s founder, Dennis Hellwig. Northern Beef last paid the earthmover in October 2007. Scott Olson Digging received $3,109,771 and claimed it was owed another $1,718,380.

After the trial, Northern Beef agreed to pay one of the dispute invoices for $32,653.

The judge said there was “substantial doubt about the disputed invoices” remaining. He rejected several and set smaller amounts for others. His final calculation was that Northern Beef owed Scott Olson Digging a total $3,314,875. Subtracting the amounts already paid, the judge determined that $205,104 was still owed by Northern Beef to the contractor.

The judge’s rulings came more than three months after the four-day trial in Pierre ended. He said several times in the 34-page decision that matters were muddy and evidence often was lacking.

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