Several trucking companies, logistics firms and cold storage providers are collectively owed millions of dollars after an Iowa-based frozen meat importer filed for Chapter 11 bankruptcy protection recently.
South American Beef Inc., headquartered in West Des Moines, filed its petition in the U.S. Bankruptcy Court for the Southern District of Iowa last week.
According to its website, Alejandra Vidal-Soler, president of SAB, founded the company in 1999, along with her husband, Scott Graham.
Their frozen import business, sold under vendor brands as well as its own Prairie Natural brand, specializes in the purchase, import and sales of beef, lamb, goat, mutton, veal, seafood and poultry from countries including Argentina, Uruguay, Australia, New Zealand, China and some countries in Central America.
In its filing, SAB lists both its assets and liabilities as between $10 million and $50 million. The petition states the company has up to 99 creditors and maintains that funds will be available for distribution to unsecured creditors once it pays administrative fees.
Among SAB’s top 20 unsecured creditors that handle the company’s transportation and logistics endeavors in the U.S. are Scotlynn USA Division of Fort Myers, Florida, owed over $529,000; Holt Logistics Corp. of Gloucester City, New Jersey, owed nearly $102,000; and TAFS Inc. of Houston, owed around $45,000.
The petition also lists three companies that are part of temperature-controlled logistics giant Lineage, headquartered in Novi, Michigan, as secured creditors with warehouseman’s liens against SAB’s frozen food inventory for nonpayment: Lineage Logistics of Pasadena, California, owed more than $210,000; Lineage Transportation of Dallas, owed around $76,000; and Lineage Custom Brokerage of Tacoma, Washington, owed nearly $60,000.
Americold Logistics of St. Louis, owed approximately $69,000, is also listed as a secured creditor.
According to SAB, the meat importer’s gross revenues from Jan. 1 until its bankruptcy filing date are nearly $57 million. Its petition states the company made around $96 million in 2021 and approximately $68 million in 2020.
In the filing, it lists JPMorgan Chase Bank of Chicago (Chase) as a secured creditor, providing the meat importer with a revolving line of credit of more than $14.4 million.
On Friday, U.S. Bankruptcy Judge Anita L. Shodeen agreed to the meat importer’s first-day motion to honor pre-petition obligations to pay employees and sales commissions. However, she denied that SAB could use “cash collateral for payment of any expense items listed on the budget that would result in payment of a pre-petition obligation” owed by SAB, the filing states.
Chase claims in court documents that South American Beef has been in “default on its loan obligations” to the bank for more than a year and opposed the meat importer’s cash collateral motion.
During the time when SAB was seeking to refinance or pursue an alternative transaction that would address the meat importer’s loan obligation to the bank, Chase continued to allow the company credit extensions, “even funding out-of-formula overadvances from late August through early November,” the company stated in court filings.
The bank claims the meat importer “has been unable to fix its business issues, refinance its debt with Chase or sell its business.
“Instead, during the time the situation deteriorated further, as Chase learned of mismanagement and questionable business practices of [SAB] in violation of its loan agreement,” according to the bank’s motion to deny the meat company’s use of cash collateral.
As of publication, Vidal-Soler, president of SAB, and the meat importer’s bankruptcy attorney, Jeffrey D. Goetz, had not responded to FreightWaves’ request seeking comment.
Chase states in its motion that it appears SAB intends to wind down and liquidate as the company’s “proposed four-week budget anticipates only the sale of existing inventory and collection of existing receivables and does not anticipate new inventory purchases.”
A final hearing on the use of cash collateral is set for Jan. 5.
Read more articles here:
Ex-office manager, husband accused of stealing $600,000 from trucking company
Imprisoned trucking company embezzler awaits sentencing on PPP fraud
Wyotrans’ Chapter 11 bankruptcy case ‘hitting rough waters,’ trustee says
The post Truckers, logistics firms owed millions after meat importer’s bankruptcy appeared first on FreightWaves.