Kane Beef is in receivership, based on documents obtained by 6 Investigates on Monday.
The beef processor owes millions to cattle ranchers and other creditors, Richard Schmidt, the court-ordered receiver, says.
Schmidt, a former federal bankruptcy judge, stressed the difference between receivership and bankruptcy. He notes that receivership allows time to cut costs, retain employees, maintain operations and, go to market for a suitable buyer or investor.
Kane’s debts to the city in the form of unpaid water bills and economic incentives remain an issue but, city leaders and Schmidt are working to get those debts resolved.
Meanwhile, Schmidt says the plant will continue operations.
“This is way too important to the community, – not just money owed the city but the fact that we’re the 10th largest slaughterhouse in the country,” Schmidt tells KRIS 6. “We supply meat across the country.”
“We’re going to do the best we can.”
Schmidt says, despite financial difficulties primarily created by debt, Kane still does “a half-billion a year in sales on a $25 million payroll and annually annually processes 267,000 heads of cattle from 30 feed lots around Texas.
”We’ll try to obtain new financing or new ownership – both with the goal of continuing to operate … we’re still running. We still employ about 750 people and we’ve cut costs to executive salaries while trimming back in other areas.”
Schmidt says the next 90 days will be critical as the company streamlines, cuts costs and courts viable investors or buyers.