Agriprocessors declared bankruptcy in November

I missed this one – the Postville plant which was raided in May this year (see prior postings) filed on bankruptcy on November 4. It is still operating at a much lower volume. Below is the article about the bankruptcy filing by the Des Moines Register.
Agriprocessors files for bankruptcy after bank seeks to foreclose
ERIN JORDAN • • November 5, 2008
A kosher meatpacking plant in Postville filed for bankruptcy Tuesday, blaming a May 12 immigration raid for financial difficulties.
Agriprocessors Inc. filed for Chapter 11 protection in New York, where the headquarters are located. The Postville plant is listed as the company’s principal asset.
The company says it owes between 200 and 999 creditors $50 million to $100 million, according to records filed in U.S. District Court. Agriprocessors lists assets of $100 million to $500 million.
The company’s board of directors met Tuesday and decided to file for bankruptcy a day before a scheduled hearing on a lawsuit from the company’s largest lender, First Bank of St. Louis.

First Bank alleged in a federal lawsuit Friday that Agriprocessors defaulted on a $35 million loan and overstated how much money it had available. The bank is seeking to foreclose on the Postville plant and appoint a third party to oversee the company’s assets.
An affidavit filed with the bankruptcy petition says the bankruptcy will temporarily halt the lawsuit.
Plant owner Abraham Rubashkin stated in the affidavit that before the raid, the plant had annual revenue of more than $300 million and employed about 1,000 people. After arrests of about 389 people, the plant is down to 250 to 300 employees, Rubashkin said in the document.
Among the company’s largest creditors are Jacobson Staffing Corp.on, of Des Moines, which Agriprocessors owes $845,000. The company owes $806,970 to Weyerhaeuser Paper Co. of Chicago.
Other creditors include Alliant Energy, Postville Farmers Co-op and USDA
Food Safety and Inspections.
Sen. Mark Zieman, R-Postville, was not surprised to learn about the bankruptcy.
“I haven’t understood why they didn’t do it before,” he said. “They’ve got creditors all over them.”
Zieman said he talked with Agriprocessors management over the years about paying bills to construction companies, trucking firms and other businesses who did work for the plant. The May immigration raid exacerbated the company’s financial problems, he said.
“I hope we can get a new management team in there so this doesn’t close,” Zieman said, adding that an Agriprocessors closure would hurt several counties in northeastern Iowa.
Tom Dietrick, who owns Dietrick Turkey Farm in Cedar Falls, said Agriprocessors owes him money for a flock of 20,000 turkeys that Dietrick could not deliver to the plant following the raid.
The plant couldn’t accept the turkeys because they didn’t have enough workers to process the meat, Dietrick said. The 79-year-old turkey farmer sold some of the birds to other buyers, but the turkeys were older and Dietrick did not recoup his losses, he said.
“The problem I see is that the government waited 15 years to get after them,” Dietrick said about the raid.
Agriprocessors came to the Allamakee County town of 2,200 people in the mid 1980s. It changed the landscape of the town from predominantly white rural farmers to a multicultural hub of workers from nearly 20 countries.