(In today's Freudian slip, I first type White Oaf.)

White Oak Global Advisors from San Francisco announced yesterday that it finalized its acquisition of Northern Beef Packers in Aberdeen. White Oak's press release (text below, as prepared by Sioux Falls ad firm Fresh Produce) is more about saying nothing than explaining anything. The previously publicized purchase price is $44.3 million, but White Oak is really spending only $4.8 million in cash; the remainder is White Oak cashing in chips it previously put on NBP's table to keep the state-backed money-mashing machine creaking along into its bankruptcy last summer.

Remember, Northern Beef Packers made $80 million in EB-5 investment and $152 million in total investment capital disappear in its five years of construction and nine months of abortive operation. White Oak—or, more accurately, the newest shell corporation to be tangled into Northern Beef Packers, New Angus LLC, which as of this morning does not appear in South Dakota's corporate database—is acquiring this asset for a bit more than three cents on the dollar in new money.

David Montgomery reports that White Oak/New Angus may have trouble recouping even that meager investment:

Cattle industry expert Steve Kay, publisher of Cattle Buyers Weekly, was doubtful. With the U.S. cattle market declining and a half-dozen competing meat-packing plants already open in the region, Kay said there’s not room for another packer.

“It’s tough for me to see that White Oak’s new operators can possibly compete against six other packers, all competing for the same shrinking supply of cattle in the region,” Kay said. “The new owners, I don’t know how well they know how the beef industry actually works. I wish them the very best, but they will need more than luck” [David Montgomery, "Investment Firm Completes Purchase of Beef Plant," that Sioux Falls paper, 2014.04.01].

Here's the White Oak press release, which is all board-room bluster and the obligatory "move forward" but mostly a pointedly explicit refusal to say anything specific:

New ownership for Northern Beef Packers presents new opportunity

Sioux Falls, SD – White Oak Global Advisors, LLC (“White Oak”) is pleased to announce the purchase of the operating assets of Northern Beef Packers Limited Partnership (“Northern Beef Packers”). The beef packing plant and associated assets (the “Facility”) were purchased free and clear of past liabilities and obligations by New Angus, LLC, a new entity established by White Oak.

The purchase removes the Facility from the Chapter 11 bankruptcy proceeding of Northern Beef Packers, providing the plant an opportunity to move forward unimpeded by its previous financial obstacles.

White Oak is currently evaluating its strategic options and remains confident in the Facility’s future as an operating plant. The Facility has the potential to be a success for both the community and its stakeholders. White Oak views the purchase as an investment in both South Dakota and its surrounding

White Oak will not be available for comment at this time, but looks forward to providing additional information as time and circumstance allow [White Oak Global Advisors, press release, 2014.04.01].


Has White Oak already found a sucker buyer for Northern Beef Packers?

An eager reader catches notice of a motion filed in bankruptcy court by White Oak Global Advisors on Monday, January 20, seeking authority to sell Northern Beef Packers assets under Bankruptcy Code Section 363. That section appears to allow the sale of assets from a bankrupt entity "free and clear of liens and encumbrances."

Hmmm... White Oak won Northern Beef Packers at bankruptcy auction in December for pennies on the dollar. If White Oak turns NBP over for a few more pennies, they clear the debt they incurred keeping NBP afloat with mystery money, and a new buyet gets to take a run at realizing the economic dreams of Mike Rounds et al. without the legal complications NBP has accrued in its failed start-up period.

I invite commentary from financially wizardous readers: what does this motion mean? Who's the next contestant in keeping Aberdeen alive?


White Oak Global Advisors of San Francisco bought Northern Beef Packers at bankruptcy auction yesterday. They put up only $4.8 million in cash, compared to the $12.75 million in cash offered by actual meat-packing company American Foods Group of Green Bay.

David Montgomery can smell the manure from his office:

It’s entirely possible that White Oak’s loan was intended from the very beginning to be a stealth purchase of Northern Beef. We don’t know, because the company has refused to comment. Northern Beef attorney Rory King told the Aberdeen American News that White Oak “might open and market (the beef) plant.”

The purchase is the latest twist in Northern Beef’s debt. Earlier, the company took out a $30 million loan — and then negated the loan by buying the lender. Then Northern Beef borrowed $35 million from White Oak — and had that loan erased when the lender bought it [David Montgomery, "Another Twist in the Northern Beef Saga," Political Smokeout, 2013.12.05].

White Oak bought the company to which it loaned millions. It now owes millions to itself. The disposition of that loan is as fishy as the disposition of the loan Epoch Star made to NBP before NBP bought it in 2010. Huge sums of money are appearing and disappearing... and the state is sitting idly by, refusing to take action in what looks more and more like a crooked shell game.


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