Northern Beef Packers owes 35 foreign investors a collective $18.5 million that they invested in the company’s failed beef plant, their attorneys said in a lawsuit claiming officials misrepresented the financial health of the project, according to court documents filed in Hughes County Circuit Court.
The complaint alleges the Aberdeen, S.D.-based packer lacked adequate financing and already had been experiencing years of delays.
Efforts to get the plant up and running dated at least to 2006. The plant opened in October 2012, but by July 2013 filed for bankruptcy and laid off 108 employees citing poor beef processing margins for boosting start-up costs. The lawsuit notes that Northern Beef Packers disclosed in its bankruptcy filing that its failure resulted from insufficient capital and financing.
Along the way the company sought investors through the federal EB-5 immigration program, which swaps green cards for investments. The suit includes documentation of a confidential offering sent to investors assuring, among other things, that there would be plenty of cattle and corn within a 150-mile radius of Aberdeen to keep production costs in check and give a competitive edge.
The lawsuit alleges such representations were materially false, and each of the 35 foreign investors was unlawfully solicited to invest $530,000.