On May 3, 2004, Furnas County Farms and its related entities filed for protection under Chapter 11 of the Federal Bankruptcy Code. The purpose is to allow the Columbus, Nebraska-based company to reorganize its financial obligations while it continues to operate, said a company news release.
The company’s lenders are carrying an estimated $172 million in unsecured debt, according to records on file at the U.S. Bankruptcy Court in Omaha.
Charles Sand, Jr., started the company in the 1970s. Today it has a 50,000-sow herd and operates as a farrow-to-finish system, raising pigs throughout the state of Nebraska and into Western Iowa.
Furnas County Farms annually uses more than 5 million bushels of locally grown corn in Nebraska’s Arapahoe and Spalding areas, according to Scott Burroughs, who’s part of an interim management team. The company employs 375 people, and buys goods and services from more than 1,200 suppliers. Farnum County Farms’s operations make up about 15 percent of all pigs produced in Nebraska.
Among the various ventures included in the business complex was Sand Livestock, a swine facility/equipment company. Throughout the years, the company also has had business activities in other countries.
“The purpose of the Chapter 11 filing is to facilitate an orderly sale of the company, which both the company and its banks believe is in everyone’s best interests,” a company statement said. “Technically, this is accomplished under Section 363 of the bankruptcy code, and is referred to as a ‘363 sale’.”
Sand hired Steve Weiss, executive management consultant, and Burroughs, in August 2003 to facilitate the sales process and oversee day-to-day operations. Sand has since retired from Furnas County Farms’ day-to-day business activities.
The company has signed a letter of intent with a potential buyer. The intention is to qualify this potential buyer in order to finalize an asset-purchase agreement and conduct a 363-sale process, the purpose of which will be to solicit other potential purchasers to ensure that the best possible price is achieved.
“I am encouraged about the future of this business and for the companies, people, and communities that depend on it a livelihood,” said Weiss. “It appears that there is a viable buyer, and we are hopeful that jobs, suppliers and local economies will be unaffected as a result.” It’s possible that a sale could by this fall.
The Company and its bank group have made provisions to prevent disruptions in its business during the Chapter 11 period. “Goods and services delivered from this day forward will be paid for within normal credit terms,” according to Burroughs. “We have made provisions so that we are able to operate ‘business as usual’ through the sales process.