SIOUX FALLS, S.D. (AP) — A federal bankruptcy judge on Thursday approved an idled South Dakota beef packing plant's request for $2.25 million in credit so it can employ an investment banking firm to pursue a sale.
Judge Charles Nail during a hearing in Pierre approved Northern Beef Packers' request to borrow the money from White Oak Global Advisors so it can hire investment banking firm Lincoln International to market and sell the 420,000-square-foot facility in Aberdeen.
Lincoln International plans to seek a "stalking horse" bid in which one potential buyer makes an initial offer to set the floor for an auction. Northern Beef wants the auction held by Dec. 3 with the sale to close by Dec. 27.
On Monday, Assistant U.S. trustee James Snyder withdrew his August motion to change the case to a Chapter 7 liquidation to protect the interests of creditors and the estate and to prevent further delay and default. Snyder in his initial motion had said that White Oak was the only party offering financing terms that will allow the case to remain under Chapter 11 protection.
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.
Now, with $138.8 million in liabilities and just $79.3 million in assets, according to court documents, the plant has laid off most of its employees.
Once locally owned, Northern Beef Packers is 41 percent owned by businessman Oshik Song with 69 other Korean investors who each gave at least $500,000 under the federal EB-5 program that encourages foreign investment in exchange for qualifications to secure permanent residency.