Northern Beef Packers is asking a federal bankruptcy judge to allow it to borrow $2.25 million from White Oak Global Advisors in order to hire an investment banking firm to market and sell its Aberdeen, S.D., processing plant. The company is seeking to avoid liquidation, reports the Associated Press.
The investment banking firm, Lincoln International, would look for a ‘‘stalking horse’’ bid, in which one potential buyer makes an initial offer to set the floor for an auction that invites competitive bids. In its petition filed last week, Northern Beef said the plan offers the best chance ‘‘to resume operations and restore jobs to the community.’’
Judge Charles Nail denied Northern Beef’s initial request for post-petition on Aug. 8, prompting the company to withdraw its financing plan. With no replacement motion filed, Assistant U.S. trustee James Snyder asked the court to change the case to a Chapter 7 liquidation to protect the interests of creditors and the estate and to prevent further delay and default.
White Oak is the only party offering financing terms that will allow the case to remain under Chapter 11 protection, Northern Beef said.
‘‘The Debtor and the Committee believe that the only plausible alternative to the financing proposed herein and in the Stipulation would be conversion to chapter 7,’’ the company said in its petition.