Kane Beef, Corpus Christi, Tex., is now under court-ordered receivership. Burdened with massive debt, the beef plant that kills 270,000 cattle annually from 30 Texas feedlots is now under the control of former bankruptcy judge Richard S. Schmidt.
According to court documents released Monday, the U.S. District Court for the Southern District of Texas handed Schmidt control of Kane’s finances and all of its property and assets, including the plant that has been in business for more than 60 years.
Schmidt told local Corpus Christi media that Kane Beef owes millions to cattle ranchers and other creditors, including the city of Corpus Christi. Schmidt stressed the difference between receivership and bankruptcy. He said receivership allows time to cut costs, retain employees, maintain operations and, go to market for a suitable buyer or investor.
“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 told KRIS TV 6. “We supply meat across the country. We’re going to do the best we can.”
Kane Beef employs 750 people and generates about $500 million in annual sales, making it the tenth-largest beef plant in the nation, according to local media.
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.
Schmidt said he would “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.” Kane’s payroll is about $25 million annually.
Schmidt says the next 90 days will be critical as the company streamlines, cuts costs and courts viable investors or buyers.
The Kane family owned and operated the business from the late 1940s until selling to a group of Texas cattlemen in 2013. They, in turn, sold the business in December, 2015, to the Fernandez Group, a South American dairy operator.