Agriprocessors files for bankruptcy protection
November 5, 2008
DES MOINES — Kosher slaughterhouse Agriprocessors has filed for bankruptcy, blaming a May immigration raid for financial difficulties.
The move to file for Chapter 11 bankruptcy protection on Tuesday came a day before Agriprocessors was to meet in federal court with its biggest lender, First Bank of St. Louis.
Agriprocessors said in the filing that it is “actively seeking new sources of financing,” and thinks it can restructure.
The filing followed a lawsuit submitted last week by First Bank in U.S. District Court in Cedar Rapids that claimed Agriprocessors overstated how much money it has available. The suit said the company is either unable or unwilling to meet its loan payments.
The earlier suit names Agriprocessors owner Aaron Rubashkin, his son and former CEO Sholom Rubashkin and slaughterhouses in Postville, Iowa, and Gordon, Neb. In addition to livestock and plant equipment, the suit includes the Rubashkins’ personal property as collateral.
First Bank is seeking to foreclose on the plant in Postville and appoint a third party to oversee Agriprocessors’ assets.
The bankruptcy filing said Agriprocessors owes $50 million to $100 million to creditors.
Among the creditors is one of the plant’s staffing firms, Jacobson Staffing, to which it owes $845,389.82.
The Des Moines-based staffing company, which had served as the slaughterhouse’s human-resources and recruitment arm, suspended its relationship with the company last week, but did not give a reason.
The bankruptcy filing states that Agriprocessors owes between 200 and 999 creditors. The largest creditors range from Best Value Trucking in New York to Postville Farmers Co-Op in Postville, Iowa. Also listed is the plant’s electricity company, Alliant Energy, to which it owes $318,235.80
The departure of the 450 Jacobson staffers last week left the company with about 250 workers.
The plant was the site of a May 12 immigration raid in which 389 people were arrested.
A lawyer for the company did not immediately return a call seeking comment.