KRIS 6 News reported Monday that a federal judge had declared Kane Beef in “receivership.”
The business is the 10th-largest meat supplier in the nation, but it now owes more than $35 million to its cattle suppliers and creditors.
Former bankruptcy judge Richard Schmidt has been appointed as the company’s receiver to attempt to restructure the company and repair financial damage.
One of the first tasks will be to pay the people who are owed money. Local cattle feeders account for $37 million of the company’s debt.
“Those cattle feeders, they want to be paid,” Schmidt said. “In this particular business, they’re paid based on the number of cattle that they bring to the slaughterhouse.
“Perhaps the most important part of all this is to reorganize this business in a way, by either selling or reorganizing it, and making sure they get paid.”
Hundreds of other people who could be potentially affected are Kane Beef employees.
“This is a large employer in the Corpus area with 750 employees,” Schmidt said. “There’s $25 million in payroll annually, so it’s important that the receivership keep the company open and operating.”
However, he added employees should not fear layoffs because the cuts are being made in other areas.
Schmidt added several potential buyers have already come forward, at which point Kane Beef would likely be required to file for bankruptcy to sell the company.
“I believe that we will be successful, and that we will find a buyer, and that this company will continue. It may have a different name, but it will continue,” Schmidt said.
As for the immediate future, Schmidt said he has been granted three months to restructure operations at the company to prove to creditors that Kane Beef is a viable business. The company will be re-evaluated at that time.