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Bankruptcy judge approves sale of Furnas County Farms; farm coalition wants further investigation
(Thursday, July 8, 2004 -- CropChoice news) -- George Lauby, North Platte Bulletin, 07/07/04: The sale sets the stage for the company to be acquired by a general partnership led by a group of pork producers. The price will be between $57 million and $60 million, depending on the number of hogs and amount of feed in the company's inventory when the sale is complete, Kevin O'Hanlon of the Associated Press reported. The new owners were not individually identified. They hope to take over by next month, according to two separate reporters, including O'Hanlon. Nebraska Attorney General Jon Bruning has agreed to monitor the sale after he was requested to do so by the Friends of the Constitution, a coalition of 21 Nebraska farm, church, and environmental groups. A spokesman for the coalition said the group is not as concerned now about the legality of the new organization as they are about the legality of the old one that collasped, and its ties to other companies owned by Chuck Sand, Jr. of Columbus. If the new owners are general partners and not a corporation, the ownership conforms to the Nebraska Constitution and I-300, which restricts corporations from owning agricultural land. But John Hansen of both the the Friends of both the Constitution and the Nebraska Farmer?s Union said it is a good time for a bankruptcy trustee to be sure all the appropriate dollars from the company are put forth to satisfy Furnas County Farms' liabilities. The Friends of the Constitution question the legality of other parts of Sand's operation, including two other companies that did not file for bankruptcy -- Sand Livestock, Inc. and Sand Systems, Inc. If the sale is concluded, one of the first transactions would be to pay $1.2 million in outstanding property taxes to the counties in which the mega-hog company is located, O'Hanlon said. Furnas Farms feeds and markets about 15 percent of the hogs in Nebraska. It buys about $600,000 worth of grain a month and pays nearly $6 million a month in other expenses. The company has some 50,000 sows and operates in three states. In the company's bankruptcy filing, owners listed nearly $200 million in liabilities to more than 200 creditors, against $90 million in assets. Banks from a wide area of the country were listed as creditors. And some business affiliates of Furnas, including 7-11 Pork Foods Inc. of Spalding, Arapahoe Feed Mill LLC, Furnas County Farms Marketing Co. LLC and Furnas County Trucking, have also filed for bankruptcy. Furnas County Farms has 80 hog sites in Nebraska, including those in Platte, Gosper, Furnas, Arthur and Keith counties. The company employs 375 people. Hansen said The Friends of the Constitution suspect Sand Livestock, Inc. and Sand Systems, Inc. were involved in agricultural operations in violation of I-300. "Sand Livestock, Inc. has operated illegally in the past," Hansen said. "We caught them at it. We think they may have continued to do so. There is enough reason for suspicion that we think it ought to be part of the bankruptcy process to make sure the appropriate dollars are on the table to satisfy outstanding liabilities." The Friends of the Constitution have hired a bankruptcy attorney to advise them as they research the company's structures, Hansen said. Hansen also heaped criticism on the ongoing livestock concentration of a few giant companies and the corresponding loss of open markets. Concentration puts "a lot fewer eggs in the basket and when one breaks, it has a lot bigger impact," he said. "A high percentage of these large companies have had sweetheart arrangements with packers, which the packers have in turn used to destroy the traditional cash market essential to a viable and profitable hog sector," Hansen said. "In the end, Chuck Sands went broke because his system could not produce hogs and sell them into the market place at a profitable level, even with his market power and leverage," Hansen said. More information about Friends of the Constitution is at: http://www.i300.org . Sand Livestock's webpage, http://www.sandlivestock.com , is not working. | |
