Sam Kane Beef Processors files bankruptcy to facilitate asset sale

By Caroline Salls

Pittsburgh, Jan. 23 – Sam Kane Beef Processors, LLC’s receiver placed the company in Chapter 11 bankruptcy Tuesday in the U.S. Bankruptcy Court for the Southern District of Texas to facilitate an ongoing asset sale process and to assure the fair treatment of the company’s creditors and employees, according to a news release.

Same Kane Beef said the receiver, who is identified as Richard S. Schmidt in court filings, decided that bankruptcy is the best implementation method to assure a speedy sale and transfer of Sam Kane’s assets to a new owner.

Chapter 11 will also allow for continued lending from either Sam Kane’s lending institution or a debtor-in-possession lender, the release said.

Schmidt said in a statement filed with the court that Sam Kane Beef’s investment banker has received bids for the purchase of the company’s assets, and Sam Kane Beef is in the process of selecting a lead bidder and negotiating definitive documentation for a stalking horse transaction.

In addition, Schmidt said that Sam Kane Beef lender Marquette Transportation Finance, LLC failed on Jan. 22 to advance funds needed to pay for purchased cattle, fund payroll and other operating expenses incurred as requested by the receiver in accordance with a finance stipulation and failed to assure the receiver that the expenses would be funded.

“Lacking assurance of continued for funding for cattle purchases and operations, the debtor filed this bankruptcy case on emergency basis,” Schmidt said.

The receiver said he was appointed on Oct. 5 at the request of the United States as a result of Sam Kane Beef’s failure to make payments required under an injunction for the purchase of livestock.

The company has requested court approval to use either estate property or Marquette’s cash collateral to fund its operations while in bankruptcy.

According to the bankruptcy petition, Sam Kane Beef has $50 million to $100 million in both assets and debt.

The company’s largest unsecured creditors are Marquette Commercial Finance of Minneapolis, with a $47.62 million claim; Luckey Custom Feedlot of Devine, Texas, with a $5.84 million claim; Carrizo Feeders of Carrizo Springs, Texas, with a $4.17 million claim; Texana Feeders of Floresville, Texas, with a $3.37 million claim; Runnells Peters Feedyards of Quemado, Texas, with a $3.09 million claim; Morales Feedlot of Devine, Texas, with a $2.75 million claim; Bar G Feedyard of Hereford, Texas, with a $1.93 million claim; Lubbock Feeders of Wichita, Kan., with a $1.89 million claim; Amigo’s Beef Cattle of Corpus Christi, Texas, with a $1.84 million claim; and MGM Cattle of Kingsbury, Texas, with a $1.79 million claim.

Okin Adams LLP is serving as the company’s legal counsel, Claro Group as its financial adviser and Gordian Group as its investment banker.

Sam Kane Beef Processors is a Corpus Christi, Texas-based processor and distributor of beef and beef products. The Chapter 11 case number is 19-20020.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.