The receiver for Eastern Canada’s largest slaughter plant for cull cattle plans to put the facility up for sale, whether it goes in one fell swoop or piece by piece.
Benoit Gingues of receiver RSM Richter said in a notice filed last week in Quebec Superior Court in Montreal that the "intended plan of action" is to sell the assets of the Levinoff-Colbex slaughter plant at St-Cyrille-de-Wendover, Que.
The plan, he wrote, is to sell the assets either by tender or by other means, either individually or "en bloc."
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RSM Richter’s filing on June 8 names the National Bank of Canada as the first-rank secured creditor on the facility, owed just under $7.15 million.
The second-rank secured creditor is the facility’s majority owner, the Federation des producteurs de bovins du Quebec (FPBQ), owed just under $20.79 million.
The plant’s employees, meanwhile, are guaranteed about $600,000, or up to $2,000 each for their work in the six months before the receivership was confirmed, as per the federal Bankruptcy and Insolvency Act.
The employees, however, are also collectively the facility’s largest unsecured creditor, owed a total of $1.21 million on a list of Levinoff-Colbex’s other unaudited known creditors.
RSM Richter’s list includes 279 other unsecured creditors, who combined with the employees have claims worth $5.26 million. Those claims, apart from that of the employees, are so far listed as "not proved."
Among the company’s assets, according to RSM Richter, are accounts receivable of $2.89 million, inventory worth $1.31 million, a building worth $9.2 million, $7.4 million in machinery and equipment, and land worth $385,750.
Levinoff-Colbex has been the main cull cow packer for producers in Quebec, Atlantic Canada and Ontario since Kitchener’s Gencor Foods plant shut its doors in 2008.
The Colbex plant at St-Cyrille, northeast of Drummondville, was the focus of a blockade by cattle producers in 2004 in the wake of the BSE crisis, when the bottom dropped out of the market for cull cattle from dairy and beef operations.
The FPBQ, through a levy on incoming cull cattle, bought an 80 per cent stake in the plant in 2007 and began paying 42 per cents per pound for cattle delivered there.
Producers in 2008 voted to contribute $53.86 per cull cow for another capital injection of $30 million into the facility, then voted in April this year to pursue a new co-op ownership model.
Interim financing for the facility then fell through and the Colbex plant’s executives and directors resigned en masse on May 27. The plant closed indefinitely the next day and RSM Richter took control of the assets June 1.
Related story:
Quebec’s Colbex beef plant in receivership, June 2, 2012
