The Horizon Foods poultry plant at 2201 West Second Ave. has discontinued operations, but Vice President Rory Botto is hopeful that the facility — designed to process spent laying hens for foreign markets — may soon be sold and reopen again “within two or three weeks.”
Botto announced the shutdown Monday afternoon. He said a sale is possible as negotiations are under way and said the decision to close the plant — which opened in July 2012 and was employing about 180 — was made by an advisory board working with the Scorpion Capital Partners investment group of New York. Scorpion, he said, is representing several Horizon investors who were not identified.
A Scorpion spokesman, Chief Financial Officer Robert Schoff, however, said no such determination on closure had been made by or involving the investment firm and the actual reason behind the shutdown was “probably” that Horizon “is out of cash.”
“The company just doesn’t have any money,” Schoff said. “Investors are disappointed and likely won’t be putting any more money in it. Investors have stepped up several times to meet demands of the company, but for whatever reasons, the company just wasn’t able to make it work. The company doesn’t have enough cash to meet its liabilities, and the investors are looking to get out of it.”
Schoff said he wasn’t able to identify any of the “about six” investors, all from out of state, but early accounts of the 2011 purchase and renovation of the former Tyson plant indicated Botto was a lead partner. Botto formerly operated a wholesale meat brokerage and processing company with facilities in Stockton, Calif., and Yerington, Nev. Schoff said investors are “hopeful of a sale” and “need someone to step forward as a buyer.”
Asked about reports that some Horizon employees have had difficulty attempting to cash payroll checks, Botto — who previously stated that the plant represented an investment of about $5 million — confirmed that “some payroll problems have unfortunately occurred.” He said he doesn’t “have an answer for that yet,” but believed that Scorpion officials or the other investors might provide guidance in “dealing with the problem.”
“Nothing specific about payroll has been discussed,” said Schoff, who explained that Scorpion provided Horizon with financing oversight but isn’t responsible for “day-to-day” operations.
“We’re not running the investment,” he said.
Botto said he’s disappointed that the company’s finances haven’t improved.
“We’ve tried everything,” he said. “We just need to stand back and regroup. I’m like everyone else. I don’t have a lot of additional information. I’m waiting to see what develops.”
In early April, Pine Bluff Wastewater Utility manager Ken Johnson confirmed that the city was considering seeking a court judgment against Horizon in an effort to collect $26,620.50 in unpaid sewer fees from December through February. Johnson said the total represented the largest unpaid bill he had seen in his 30-year career.
A couple of days later, Botto said Horizon — which had previously had a brief shutdown — was formulating a plan to satisfy debts to PBWU and other creditors. He expressed confidence at that time that the company would rebound.
“We don’t have any intention of quitting,” said Botto. “We’re doing everything possible to become a prosperous company and pay our debts.” Botto was still as certain Monday, saying, “I’m not going anywhere. I’ll be right here.”
But on Tuesday, Johnson said Horizon’s debt to PBWU had grown to more than $30,000.
“We want to help keep our industries here but we expect them to pay their debts,” Johnson said. “In this case, we’ve all but exhausted our efforts. We’re prepared to initiate legal proceedings to obtain a judgment.”
Botto said the company had “paid some” but needed “to pay more” on the bill. Johnson agreed.
“We’ve been in touch with Horizon,” Johnson said. “If we can validate payment plans on their part, we’ll work with them, but we get a different story each time we call.”
In March, Botto said Horizon had surpassed its anticipated start-up costs by $1.7 million. He said much of that amount resulted in losses because of thefts of copper wiring and plumbing pipes from and vandalism to the plant before Horizon was able to initiate processing preparations.
Botto, who has been in the meat processing business since 1957, said operations had also been impaired by worldwide economic conditions and market problems that included a seasonal delay of hens being delivered to the plant.
“We’ve done everything humanly possible to stay here,” Botto said Monday. “We want to, but at this point we have to shut down.”