Trustee wants Chapter 7 bankruptcy for beef plantSIOUX FALLS, S.D. (AP) — A federal trustee asked a judge Tuesday to convert a troubled South Dakota beef processing plant's bankruptcy to a Chapter 7 liquidation.
By: DIRK LAMMERS, Associated Press Writer, Associated Press
SIOUX FALLS, S.D. (AP) — A federal trustee asked a judge Tuesday to convert a troubled South Dakota beef processing plant's bankruptcy to a Chapter 7 liquidation.
Assistant U.S. trustee James Snyder said in a petition that he believes that Northern Beef Packers, which filed for Chapter 11 bankruptcy protection last month, is "administratively insolvent" based on company reports and statements.
"Based on currently available information, it appears the plant represents the only asset by which Debtor may generate funds to pay creditors," Snyder wrote.
Northern Beef had been trying to obtain post-petition financing so it could proceed with hiring an investment banking firm to pursue a sale of the plant.
Snyder said Northern Beef withdrew its financing plan and has not filed a replacement motion. The change from Chapter 11 protection is necessary to protect the interests of creditors and the estate and to prevent further delay and default, he said.
Land for the $109 million plant was first secured in 2006, but the company wasn't able to slaughter its first animal until late in 2012 and has since struggled to reach anywhere near its production target of 1,500 head per day.