By Des Monies Register
Postville, IA – The Agriprocessors meatpacking plant in Postville suspended production Monday, but one of its officials said the operation should reopen later this week.
The plant has struggled to survive since last May, when immigration agents raided it and arrested nearly 400 workers.
Agriprocessors 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 action on Agriprocessors; 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 the company and the lender, First Bank Business Capital, met in bankruptcy court in New York on Monday. “We ended up striking a deal,” he said.
Abrahams said the bank agreed to let Agriprocessors use cash to meet its payroll and other immediate bills.
First Bank had asked the bankruptcy court not to allow the meatpacker to spend money until its debts to the lender were cleared up. In court papers filed Friday, Agriprocessors said it needed to spend money to remain in operation while it talks to potential investors.
A cash 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 the 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.
The bankruptcy judge decided Monday to appoint a trustee to help oversee the case. Abrahams said that details of the deal will be worked out this week and that poultry production lines should resume by Thursday.
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. He is also facing federal charges of conspiring to hire undocumented workers at the plant and state charges of using underage workers.
Rubashkin was replaced earlier this year. The new chief executive officer, New York attorney Bernard Feldman, was at the bankruptcy court hearing Monday and declined comment.