By Dave DeWitte, The Gazette
A Postville rental property company led by indicted former Agriprocessors Vice President Sholom Rubashkin, filed for bankruptcy protection Monday.
Nevel Properties Corp., believed to be the largest residential rental company in Postville, sought bankruptcy protection in the face of a foreclosure action by Citizens State Bank of Postville. The company lists Sholom Rubashkin as president and Tzvi “Heshy” Rubashkin as secretary. They are sons of Agriprocessors owner Aaron Rubashkin.
The filing represents more fallout from the widespread immigration violations found when federal authorities raided Agriprocessors, once Postville’s largest employer, in May 2008. The raid yielded the arrest and deportation of about one-third of the plant’s work force. Many of them lived in Nevel Properties housing.
About 60 properties are believed to be involved in the bankruptcy filing by Nevel and related bankruptcy filings Monday by rental companies SFG and Amereeka Properties, which share the same owners.
Des Moines Attorney Jeffrey Goetz, who filed the cases for the Rubashkins, said some of the properties are rented and others sit vacant.
Goetz said one beneficial effect of the filing may be to halt utility shutoffs at the properties that became a serious concern for tenants, many of whom lost their jobs in Agriprocessors’ closing, earlier this winter.
The kosher meat packing plant shut down last fall as the company’s financial problems mounted. Production resumed on a smaller scale under direction of a federal bankruptcy receiver about two months ago, and an auction to sell the company is scheduled for March 23.
The bankruptcy filing came just as Nevel Properties was due for a state court hearing in Waukon for appointment of a receiver in a foreclosure petition against 19 of its properties by Citizens State Bank of Postville.
Citizens State Bank cast doubt on the prospects for a business reorganization in a motion filed almost immediately after Nevel Properties filed for bankruptcy protection. The bank, saying it was owed $302,173, asked the court for relief from the “automatic stay” on collection efforts against the bankruptcy filer in order to pursue its foreclosure action.
The bank said keeping the properties it seeks to foreclose on is not necessary to a reorganization by Nevel Properties “in that a successful reorganization is not prospect in this case.”
Some observers believe the closing of Agriprocessors has greatly reduced the market value of rental properties in Postville, since demand for rental housing has plunged. Goetz said the rental operation could become viable again, however, if Agriprocessors can be sold and returned to full-scale operation.
Sholom Rubashkin was recently released on bail. He faces scores of federal charges, including bank fraud, money laundering, and immigration violations, involving his role at Agriprocessors.
The bankruptcy of Nevel Properties is more bad news for the City of Postville, which is now struggling to pay the debt on a wastewater treatment facility built to handle the needs of Agriprocessors.
The City of Postville appears to be the largest unsecured creditor of the three companies, which owe about $28,000 in utility bills.
The case was filed in U.S. Bankruptcy Court for the Northern District of Iowa in Cedar Rapids under Chapter 11 of the bankruptcy code, which protects companies from creditors while they reorganize their finances in order to continue in business.
I don’t understand why this is anyones buisness!