A Florida investment firm is offering to help dig Postville’s kosher slaughterhouse out of bankruptcy, but the northeast Iowa plant’s temporary leader said he doubts the proposal will lead to a sale.
Papers filed in bankruptcy court in New York on Friday say Quantum Partners Inc. of Boca Raton, Fla., is willing to pay the millions of dollars Agriprocessors Inc. owes to its largest creditor, First Bank. Quantum Partners also said it is willing to put up $15 million to restart the plant’s operation.
The plant, the largest employer in the northeast Iowa town, has had most production halted and faces financial troubles since a May 12 immigration raid led to the loss of half of its work force and the arrest of several former managers.
Friday’s proposal would allow Quantum to take a major equity position in Agriprocessors and leave an unspecified equity stake to current owner Aaron Rubashkin. Rubashkin and his son, Sholom Rubashkin, have run the plant since the 1980s.
Quantum Partners would pay all debts owed to the St. Louis-based bank by Dec. 31, and would join forces with the Rubashkin family and operating trustee Joseph Sarachek to pay any remaining debts and government fines, according to the letter written by firm principal Marxx Theresias. Quantum Partners is “financially equipped and extremely serious” about closing the deal, Theresias wrote.
But Sarachek, a New York lawyer and the company’s temporary leader, called Quantum’s offer “a half-baked proposal.”
A bankruptcy judge has given Sarachek temporary control over the company.
Sarachek said he is trying to arrange an outright sale of the company, which is more than Quantum Partners is proposing. He said he has had little contact with the financial company, but it appears to him that the Rubashkin family, which currently owns Agriprocessors, would retain some interest in it under the new plan.
Phone calls to Theresias were not returned Friday.
Postville Mayor Robert Penrod said he had not yet heard about the proposal. The city of Postville could be on the hook for more than $4 million if the plant fails, according to recently filed papers in the bankruptcy court. The money is the balance of a 20-year federal loan used to build a sewage treatment lagoon for the company.
Also Friday, a judge in New York ordered that the bankruptcy case be moved to Iowa, as numerous creditors requested. Agriprocessors used to be the country’s largest supplier of kosher meat. It resumed limited slaughter of chickens last month, and Sarachek has said he wants to keep production going so the company can sell it as a viable operation.