Sam Kane Beef granted access to estate cash; bid procedures approved

By Caroline Salls

Pittsburgh, Jan. 31 – Sam Kane Beef Processors, LLC obtained a second interim order allowing it to use estate assets or cash collateral to fund operations through Feb. 10, according to an order filed Wednesday with the U.S. Bankruptcy Court for the Southern District of Texas.

Sam Kane Beef also received court approval of the bid procedures for the sale of its assets.

As previously reported, the company said it cannot move forward with a sale of its assets to a previously identified stalking horse bidder “as a result of circumstances well beyond the debtor’s control.”

The company said in a statement filed on Jan. 22 with the court that its investment banker has received bids for the purchase of the company’s assets and was in the process of selecting a lead bidder and negotiating definitive documentation for a stalking horse transaction.

Sam Kane Beef said lawyers for the Texas Cattle Feeders, which claims an interest in the company’s liens, “have provided notice to the debtor that seemingly withdraws their prior consent to use of estate property/cash collateral” and have demanded that Sam Kane Beef take actions that it believes would cause harm to the assets to which the Texas Cattle Feeders’ members claim an interest.

According to the cash use motion, Sam Kane Beef’s products risk becoming spoiled every day that they are not sold, and its facility poses a risk to the surrounding area if no funding is received to maintain it.

Under the bid procedures, parties that intend to submit a credit bid must file a notice of intent by 6 p.m. ET on Feb. 1. All bids are due by 4 p.m. ET on Feb. 4.

An auction will be held on Feb. 6, if necessary. Bids at auction must be made in minimum increments of $25,000.

Sam Kane Beef Processors is a Corpus Christi, Texas-based processor and distributor of beef and beef products. The company filed bankruptcy on Jan. 22 under Chapter 11 case number 19-20020.

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