Employees of Northern Beef Packers went without a paycheck for weeks before the Aberdeen business filed for bankruptcy in July. While those employees wait to get paid, attorneys and managers will be making thousands of dollars.
Northern Beef Packers is asking the bankruptcy court to approve a more than $2 million financing plan so it can prepare the shuttered Aberdeen plant for an auction sale at the end of the year.
According to the budget filed in federal court, Northern Beef has set aside more than $400,000 to pay its attorneys over the next four months. That includes money for Steve Silton, the company's main bankruptcy attorney, whose Minneapolis firm Cozen O’Connor could collect $375,000 by the end of the year.
Silton did not return a phone call for comment Monday and refused to comment after a court hearing in Sioux Falls Thursday.
But Rory King, the corporate attorney for Northern Beef out of Aberdeen, says just because that amount is budgeted, it doesn't mean that's how much attorneys will get.
"That's the cap. The court approves all bankruptcy fees,” King told KELOLAND News. "The court will be very careful in approving only fees he feels are justified.”
According to the documents, the three managers who remain at the plant will share more than $200,000 before the end of the year, including pay dating back to July 19 when Northern Beef filed for bankruptcy.
So when will all the laid off employees get paid?
King says that will happen after the plant is sold in an auction, which is currently set for December. King says $1 million will be set aside for employees to claim wages and benefits at that time.
"There's a stipulation on file that includes $1 million for unsecured creditors including employees, and the employees are preferred unsecured creditors," King said.
Not including the company that is financing Northern Beef during the bankruptcy, a total of $1.8 million in claims have been filed against the beef plant to date.