A recent development in the bankruptcy proceedings of HyLife Foods’ subsidiaries has garnered attention as creditors prepare to vote on the Chapter 11 plan. The plan, approved by a federal bankruptcy judge, has raised various concerns, with creditors given until September 28th to cast their votes.
In April, Tritek International Inc., HyLife Foods Windom, and Canwin Farms LLC, all subsidiaries of HyLife Foods, filed for bankruptcy. Together, these entities carried over $100 million in funded debt, as noted in court records.
The judge’s approval of the plan has not been without challenges. The U.S. Trustee’s Office voiced objections, asserting that the plan, in its current state, lacks confirmability. One particular concern raised was the absence of a comprehensive liquidation analysis in the Disclosure Statement.
In June, HyLife Windom ceased operations and sold its facility to Iowa Premium Pork for $14 million. Regrettably, the facility closure led to the loss of approximately 1,000 jobs, with a significant portion of those employees being on work visas.
More recently, HyLife brought to light a financial discrepancy involving Premium Iowa Pork. Allegedly, Premium Iowa Pork owes around $215,000 in property taxes due to an error in bookkeeping. In court, HyLife stated that a miscalculation led to the confusion between pre-closing and post-closing taxes.
As plans for the future of the processing facility are still under review, Iowa Premium Pork expressed intentions to utilize the plant for producing high-quality natural pork products, aligning with its existing operations in the region.
The pork industry has faced considerable challenges this year, marked by the closure of numerous facilities across the continent. HyLife, operating in both the U.S. and its home country of Canada, underwent layoffs in June, affecting 87 employees in Manitoba.
The outcome of the creditors’ vote and subsequent developments in the HyLife subsidiaries’ bankruptcy plan will continue to be of interest as the situation evolves in the coming weeks.