A Washington state feedlot has filed a motion in bankruptcy court alleging that Bartels Packing of Eugene, Ore., owed it nearly $1.7 million and that the receiver should act more quickly to resolve the bankruptcy.

A Washington feedlot alleges that a receiver who’s overseeing the dissolution of a defunct Oregon beef packing company isn’t cost effective and should be terminated.

When Bartels Packing of Eugene, Ore., shut down in March 2018, a court-appointed receiver took over the orderly settling of the company’s finances.

The Maughan Feedlot of Mattawa, Wash., is now seeking an order for the receiver, Pivotal Solutions, to “show cause” why the packer’s remaining assets should not be abandoned and its cash distributed to creditors.

“In the present case, the continued administration of the estate seems unlikely to produce positive results for the creditors,” according to Maughan’s motion.

Maughan claims to be owed nearly $1.7 million by Bartels Packing and notes the receiver has had more than 18 months to liquidate the company’s assets.

In that time, Pivotal Solution’s administrative expenses have topped $940,000, with the costs decreasing the amount of proceeds eventually received by the Maughan Feedlot, the motion said.

Since February, the amount of cash, inventory and accounts receivable has dropped by more than $1 million, the feedlot said. “It appears the receivership is not cost effective in accumulating increased assets for distribution to creditors.”

The receivership’s “continued operations” would negatively impact the creditors and so it should be terminated to “protect a maximum distribution” of the proceeds from selling Bartels’ assets, the motion said.

Richard Hooper, president of Pivotal Solutions, said his company will file a response to Maughan’s motion in court within the next week or two.

“We will respond to that at the appropriate time, but it’s not the time to do that,” he said.

A final accounting of proceeds from the sale of Bartels’ meat, equipment and other assets, and how much money was distributed to cattle suppliers and other creditors, will likely be submitted by the end of 2019 or early 2020, Hooper said. “It’s been a complicated matter.”

In a regular monthly court report, Hooper said Maughan’s motion is “premature and detrimental to the estate.”

Initially, the receiver sought to sell the beef packing company as a “going concern” that would keep the business operating and optimize the value of its assets compared to selling them piecemeal.

While one potential buyer did submit a “letter of intent” to purchase the company’s assets as a whole, the offer was eventually withdrawn and the company’s equipment was auctioned off last December.

Over the summer, the USDA issued a complaint against Bartels Packing for alleged violations of the Packers and Stockyards Act for failing to timely pay for more than 4,000 head of livestock worth more than $4.5 million.

Hooper said he’s heard of the complaint but hadn’t yet been served with it and doesn’t know the specifics.

With one less beef packer competing for local cattle, demand and prices have taken a hit to the detriment of Oregon ranchers, said Jerome Rosa, executive director of the Oregon Cattlemen’s Association.

“We do know prices were reduced, particularly in the west side of Oregon, as they were a regular buyer at several of the auction yards,” he said.

I've been working at Capital Press since 2006 and I primarily cover legislative, regulatory and legal issues.

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