SALEM, Ore. (AP) — An Oregon beef packing company that shut down earlier this year has attracted a potential buyer to purchase its facilities and equipment "as a package."
When Bartels Packing of Eugene, Oregon, closed in March, the company owed about $4.6 million to cattle suppliers and feedlots and left the local livestock market without a significant buyer.
The court-appointed receiver who took over the company's finances, Richard Hooper of Pivotal Solutions, has since met with four interested parties who toured the slaughterhouse and processing plant.
Hooper has also been in contact with liquidators, but owner Chris Bartels preferred to sell the equipment "as part of a functioning meat harvest and packing facility" to fetch the highest value, according to court documents.
One of those potential buyers has now submitted a letter of intent to purchase the packer's assets as well the underlying property, which is owned by an affiliated firm.
"Hopefully, we will be able to convert that interest into a purchase-and-sale agreement," Hooper said.
Possible sale terms and the potential buyer's identity weren't disclosed but the chance of a new beef packer operating the facilities is welcome news for Oregon's cattle industry.
"We definitely need another packer in the game," said Tom Elder, manager of the Woodburn Livestock Exchange, one of the auction yards where Bartels bid for cattle.
Though he'd like to see cattle prices go higher, the market has remained "steady" since the company shut down, Elder said. "It didn't fall apart."
Bartels was an important buyer of organic and grass fed cattle, so finding a replacement could boost prices in those niche markets by 10 to 20 percent, said Jerome Rosa, executive director of the Oregon Cattlemen's Association.
"Competition should really help to drive that market up," Rosa said, particularly since cattle shipped to more distant packers are "really getting discounted."
Hopefully, a sale would allow cattle suppliers to be repaid and the facilities to restart soon, he said. "They'd really modernized it and spent quite a bit of money on the facility."
Upon filing for receivership, owner Chris Bartels expected the company's roughly $14 million in assets would cover its $8.3 million in debt, which includes the amount owed for cattle.
The judge overseeing the case recently approved USDA "trust" payments of more than $600,000 to eligible cattle suppliers, but not all sellers qualify for such claims under federal law. Only those who don't sell livestock on credit are covered by a defunct packer's "trust" assets.
The Eugene Area Chamber of Commerce has met with the receiver and served as a "resource" to facilitate a potential sale of Bartels Packing, which employed 142 people before closing.
"Our overall hope is to find an owner-operator to run that facility and bring back those jobs," said Josh Monge, the chamber's economic development director. "We don't want it pieced out. ... It's not just the jobs, it's the economic activity surrounding that, too."
Information from: Capital Press, http://www.capitalpress.com/washington