Agriprocessors Files for Bankruptcy

By Nathaniel Popper

Published November 05, 2008.
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The kosher meat company Agriprocessors filed for bankruptcy on Tuesday after a week in which the company was hit with massive fines, lawsuits and arrests.

Agriprocessors, which had its primary slaughterhouse in Postville, Iowa, filed for Chapter 11 bankruptcy protection in federal bankruptcy court in New York claiming that it was unable to pay millions of dollars that it owes to creditors. Last week First Bank in St. Louis sued the company for allegedly defaulting on a $35 million loan.

In the bankruptcy filings, the owner of Agriprocessors, Aaron Rubashkin, stated that filing for bankruptcy should halt that lawsuit temporarily while the company attempts to restructure, suggesting that Rubashkin wants to maintain control over the company. The filing says this is important because Agriprocessors “is instrumental in helping to maintain national availability for kosher meat and poultry products throughout the United States.”

“The Debtor is actively seeking new sources of financing and believes that it will be able to restructure its overall business,” Rubashkin’s affidavit said.

The company’s CEO, Bernard Feldman, did not respond to a request for comment.

Agriprocessors’ Iowa slaughterhouse was the subject of a massive immigration raid in May, which has caused a cascading spiral of financial problems at the company. The raid came two years after an article in the Forward raised concerns about the treatment and pay of workers at the plant.

Until the raid, the company was America’s largest supplier of kosher beef and poultry. Rubashkin’s affidavit said that before the raid, the company had revenues of over $300 million a year and that it employed more than 1,000 workers.

Since the raid, executives at the company have been hit with fines for employing underage workers and for improperly docking the paychecks of workers. Last week, Aaron Rubashkin’s son, Sholom Rubashkin, was arrested and charged with helping to procure false identification for undocumented immigrants who worked at the Postville slaughterhouse.

On Friday, First Bank initiated foreclosure proceedings against Agriprocessors and called for a third party to liquidate the company’s assets immediately. The bank and company were set to meet in a court hearing today.

Over the weekend, the company gradually shut down all of its operations in Iowa, leaving hundreds of people without work.






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