Bankruptcy

Slaughterhouse (Chapter) 11

An immigration raid at a plant operated by kosher meat-packer Agriprocessors, leading to 389 arrests, is behind the problems that are leading its b...
Stephen TaubNovember 5, 2008

A kosher meatpacking plant that immigration officials raided earlier this year has put its fate before a higher business authority: bankruptcy court.

Agriprocessors Inc. filed to reorganize under Chapter 11 of the Bankruptcy Code, citing the May 12 raid for its financial difficulties, according to the Des Moines Register. The company said it owes between 200 and 999 creditors a total of between $50 million and $100 million, while it listed assets of $100 million to $500 million. Among those owed money: Jacobson Staffing, $845,389.82, and Alliant Energy, $318,235.

The company said it “is seeking its new sources of financing and believes that it will be able to restructure its overall business,” according to the news report. The filing was made one day before a scheduled hearing on a lawsuit from the company’s largest lender, First Bank of St. Louis.

The paper pointed out that First Bank had alleged in a federal lawsuit on Friday that Agriprocessors defaulted on a $35 million loan and overstated how much money it had available. The bank wants to foreclose on the Postville, Iowa, plant, the site of a May 12 immigration raid. During that raid, 389 people, mostly from Central America and Eastern Europe, were arrested. The bank also wants to appoint a third party to oversee the company’s assets.

In its lawsuit, the bank names Agriprocessors owner Aaron Rubashkin, his son, and former CEO Sholom Rubashkin, along with slaughterhouses in Postville and Gordon, Neb., according to the press reports.

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