After a hearing in federal court, Sam Kane Beef Processors LLC agreed to promptly repay nearly $38 million in payments owed to livestock sellers. The Packers and Stockyards Act requires payment of livestock purchases by the next business day. The company has 18 months to make those late payments.
Sam Kane is a fed steer and heifer processor in Corpus Christi.
The agreement comes after two complaints were filed against the processor for allegedly violating the Packers and Stockyards Act, saying the company failed to meet the timeframe for payments. Both complaints allege that of June 8, 2018, the company was 38-days late on some payments, with a few at up to 60 days late.
If the company fails to make the payments as agreed, the court will appoint a receiver to manage Sam Kane financial affairs according the Department of Justice.
A USDA-filed complaint said Sam Kane failed to pay the full purchase price for livestock within the time period required by the Packers and Stockyards Act on numerous occasions, going back to January of 2017. The Packers and Stockyards Act authorizes civil penalties of up to $11,000.
The Packers and Stockyards Act also authorizes the Department of Justice to seek injunctive relief while administrative enforcement actions are pending.
The U.S. Attorney’s Office for the Southern District of Texas subsequently filed a federal complaint seeking a preliminary injunction ordering Sam Kane to comply with the P&S Act while the administrative complaint is pending before the USDA.
Both complaints follow a prior Secretary of Agriculture order issued Jan. 17, 2017, requiring Sam Kane cease and desist from failing to pay when due the full purchase price of livestock. They also allege Sam Kane violated this order.