Kane Beef to repay nearly $38 million to cattle feeders
Kane Beef Processors LLC recently entered into an agreement with the United States Attorney to comply with the Packers and Stockyards Act and to begin to repay nearly $38 million currently owed to cattle feeders, predominantly located in South Texas. The repayment plan will result in full payment within the next 18 months, with the first $21 million to be paid within 60 days, and an additional $8 million over the next four months.
“We are pleased with the outcome reached in court this week,” said Jason Peeler, TCFA chairman. “Our top priority has been to ensure our members are paid for past shipments of cattle and guarantee that they will be paid for future shipments in accordance with federal prompt payment laws. Much of the approved payment schedule has been under discussion with Kane Beef and their current lender for the past few weeks, and we look forward to seeing it enforced by the court.”
Following a hearing in Corpus Christi federal court, Kane Beef also agreed to promptly pay for future cattle purchases by the next business day after purchases are completed, as the P&S Act requires, and to preserve and administer statutory trust assets. They also agreed to continue the position of an independent chief restructuring officer, put in place previously by an agreement between cattle feeders, Kane’s lender and Kane Beef, to manage operations, protect funds and to ensure compliance with all aspects of the agreement going forward. If Kane Beef fails to make any of the payments as agreed or abide by any terms of the agreement, the court will appoint a receiver to manage Kane Beef financial affairs.
“We appreciate the efforts by USDA and the U.S. attorney to bring Kane Beef into compliance. Resolving this issue will benefit all cattle feeders in our three-state area, the employees of Kane Beef and the South Texas economy,” Peeler said.
