Creditors of Worldwide Pork in Moose Jaw, Sask., approved a plan last week that could see the processor reopen in March.
The majority of producers and employees, as well as the provincial government and the City of Moose Jaw, agreed to a proposal that will see some creditors receive common shares in a new company that will take over the plant.
The province has about $2 million in secured debt in Worldwide Pork and is the largest secured creditor. The company owes producers about $4 million.
The proposal includes two ways to satisfy creditors’ claims:
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- Where a creditor’s claim is not more than $500 or where the creditor chooses to reduce a claim to $500, the claimant would receive within 90 days the full amount of the claim, although it wouldn’t exceed $500.
- Where a claim is more than $500 and the creditor does not choose to reduce it to $500, the creditor would receive common shares in the new company, on the basis of one share for each $100 owing.
Worldwide Pork would issue to the new company shares equivalent to 25 percent of the voting and equity interest in Worldwide.
New investors, including employees, will also receive shares.
Backpay coming
The 270 employees, most of whom have been laid off since mid-May when the plant closed, will also receive back pay and vacation entitlements.
The matter returns to court Feb. 3 for approval by Queen’s Bench justice Dennis Ball. The company has been under court protection from creditors since July.
The business plan also calls for upgrades and expansion at the Moose Jaw facility to move into the fresh chill market. Before closing, the plant provided frozen pork to the lucrative Japanese market. Its capacity is about 1,100 head per day.
The plant closed when producers stopped deliveries because of the amount owing to them.
Since then, producers have delivered hogs to other Canadian and U.S. plants.
