Sam Kane Agrees to Repay Nearly $38 Million to Local Ranchers

[nitpicker]

https://www.justice.gov/usao-sdtx/pr/sam-kane-agrees-repay-nearly-38-million-local-ranchers

Department of Justice
U.S. Attorney’s Office
Southern District of Texas

FOR IMMEDIATE RELEASE
Wednesday, July 25, 2018

Sam Kane Agrees to Repay Nearly $38 Million to Local Ranchers

CORPUS CHRISTI, Texas – Sam Kane Beef Processors LLC has entered into an agreement with the United States to comply with the Packers and Stockyards (P&S) Act and to begin to repay nearly $38 million currently owed to local livestock sellers, announced U.S. Attorney Ryan K. Patrick.

Following a hearing in Corpus Christi federal court today, Sam Kane has agreed to promptly pay for livestock purchases by the next business day after purchases are completed as the P&S Act requires. They have also agreed to a repayment plan which would result in full payment to local ranchers the nearly $38 million currently owed to them within the next 18 months. They must also preserve and administer the statutory trust and have agreed to the appointment of an independent chief restructuring officer to ensure compliance with all aspects of the agreement. If Sam Kane fails to make any of the payments as agreed or abide by any terms of the agreement, the court will appoint a receiver to manage Sam Kane financial affairs.

On June 14, 2018, two complaints were filed against Sam Kane Beef Processors LLC for alleged violations of the Packers and Stockyards (P&S) Act. The complaints allege Sam Kane is failing to timely pay for livestock. Sam Kane is a fed steer and heifer slaughtering plant located in Corpus Christi and operates subject to the P&S Act. Both complaints allege that as of June 8, 2018, Sam Kane owed approximately $34.96 million to unpaid livestock sellers at an average 38 days late with some instances up to 60 days late. The complaints allege Sam Kane’s failure to timely pay resulted in livestock sellers filing claims under the packer statutory trust totaling more than $142 million.

The U.S. Department of Agriculture (USDA) filed an administrative complaint alleging Sam Kane failed to pay the full purchase price for livestock within the time period required by the P&S Act on numerous occasions from on or about Jan. 27, 2017, through the date of the complaint. The P&S Act authorizes civil penalties of up to $11,000 per violation.
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