Postville, IA - The Agriprocessors meatpacking plant in Postville has halted production, and its leaders are awaiting the outcome of a bankruptcy hearing before deciding what to do next. The plant has struggled to survive in the wake of an immigration raid last May. It stopped slaughtering cattle a few weeks ago, but it had continued processing chickens until last week.
Among its many challenges are the fact that its biggest lender has sought foreclosure; that its former top executive was jailed last week on a federal bank-fraud charge; and that it filed for bankruptcy earlier this month.
Chaim Abrahams, an Agriprocessors manager who has served as a company spokesman, said today that the plant had stopped production. Abrahams said he was at a bankruptcy court hearing in New York. On the line was a request that the company be allowed to pay bills, including last week�s payroll, so it could continue operations.
Agriprocessors� main lender, First Bank, has asked the bankruptcy court not to allow the meatpacker to spend money until its debts to the bank are cleared up. In court papers filed Friday, Agriprocessors said it needs to remain in operation while it talks to potential investors. A cash-flow freeze, the company said, "will cause irreparable harm to other creditors and leave (Agriprocessors) with no choice but to immediately cease all active operations.?
The company offered assurances to First Bank that its money would be repaid, but it said it needs to spend close to $1 million to pay its bills, including more than $300,000 for paychecks for line workers and rabbis who oversee production of kosher meat.
Sholom Rubashkin, who ran the plant for decades, was arrested Friday on a federal bank-fraud charge. The charge alleged that he moved company money around in a way that allowed Agriprocessors to draw down more than it was entitled to from a $35 million line of credit from First Bank.
Rubashkin was replaced earlier this year by a new chief executive officer, New York attorney Bernard Feldman, who was at the bankruptcy court hearing today.
(Source: Des Monies Register)
http://www.theyeshivaworld.com/article.php?p=26062
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