White Oak Global Investors, the San Francisco-based lending company that previously loaned millions to Northern Beef Packers, made the top bid for the beef plant today.
Judge Charles Nail in Sioux Falls accepted White Oak's cash and credit bid of $44.35 million. The only other bidder, American Foods Group, offered the minimum bid of $12.75 million, but did not counter White Oak's bid.
Reaction to White Oak being accepted as highest bidder:
“I hope that White Oak has the intention to start that plant back up as quickly as possible and employ all the good employees they previously had, and start to slaughter all the fine beef that South Dakota has to offer" said Jim Barringer, executive vice president of Aberdeen Development Corp. "I’m excited about this transfer of ownership and I am optimistic that things will work out well for everyone concerned."
A commentor at Madville Times is not as optimistic as the Aberdeen Development Corp crony:
So let me get this straight. White Oak loaned 35mil to NBP of which 32Mil was then used to purchase a shell company sending that money offshore. Now White Oak who is possibly up to their hips in this gets NBP and Epoch Star for under 4Mil. Didn't the Green Bay Packer bid of 12Mil still carry some of the liability of the fees, credit and taxes etc?
White Oak getting this bid, where's Epoch Star as the guarantor of the auction loan and how about a good ol Claw Back of those 32Mil to purchase the shill Epoch Star, Judge Nail? How about those 32Mil, who gets that money your Honor?
Good luck Aberdeen Developement Corp!
And here we have secrecy and more glory talk from an Aberdeen Development crony:
After the court proceeding Thursday White Oak Global's General Counsel Matthew Caudill told KELOLAND News the company doesn't talk to the media.
However, the attorney who represents the plant's unsecured creditors and the employees who weren't getting paid did talk with KELOLAND News. He thinks the workers will eventually get their checks.
"I think at the end of the day they'll get paid in full," attorney Steve Jakubowski said.
But Jakubowski thinks it may take up to six months for those workers to get paid.
Julie Johnson, the executive director for the economic development organization Absolutely! Aberdeen, says Thursday's developments are good news.
"We know who the players are now, that's the important next step. They have a few things to work out with the court and a few other decisions to be made about who gets paid, so we'll await that process," Johnson said.
Despite the troubles of the facility in the past, Johnson says the Thursday auction is an important step toward making the Northern Beef Packers plant an asset for the community and region.
"We know we have the only state-of-the-art beef packing plant built in the northern Great Plains in 50 plus years, so it's an asset to Aberdeen. It's also terribly important to the cattle producers from five or six states around here, so we know it's a strategic asset," Johnson said.
This whole thing smells. There has been too much focus on the EB-5 program. SOuth Dakota taxpayers should be demanding an audit and full disclosure on the money trails. But when we operate under publi/private partnerships, the "private" element demand privacy while the "public" element stands in teh dark.
UPDATE: Here is some Political Smokeout from David Montgomery:
But White Oak wasn’t actually writing a $44 million check.
Instead, the cash portion of their bid was just $4.8 million, all to satisfy liens on the plant.
The rest of their money was an offer to write-down $39.5 million in debt White Oak claims Northern Beef owes them.
I wrote about this saga several weeks ago. Some of the other creditors are challenging how much money White Oak is actually owed.
Now, depending on what actually happened to White Oak’s money, their capital outflow that gave them ownership of Northern Beef could still end up significant. It’s hard to tell, given the complex financial mechanisms at work.
It’s entirely possible that White Oak’s loan was intended from the very beginning to be a stealth purchase of Northern Beef. We don’t know, because the company has refused to comment.