Agriprocessors roller coaster mounts another climb

Members of upper management at Agriprocessors scrambled in Postville Friday to conduct a meeting at the plant before the start of the Jewish sabbath at sundown. While the exact details of the meeting remain unknown, the Iowa Independent has confirmed that employee pay and plant operations were two of the topics discussed.

Jewish rabbis, who provide the required religious-based cut and inspections that are a part of the kosher slaughter process, were not paid Friday, and it was not the first time time that the kosher slaughterers (shochtim) and rabbis at Agriprocessors have gone without compensation. Other employees did receive paychecks, although some voiced concern that the checks may not clear. The rabbis were asked for patience and promised payments as soon as possible.

According to a source who attended the meeting, the plant plans to concentrate on poultry production — particularly on chicken — in the near future. The plant’s beef line has operated only sporadically over the past two weeks.

The decision to focus on poultry is intended to provide liquidity to the failing meatpacker, and it is seen as a necessary step in the wake of employee losses that have left the plant with less than a third of its full-capacity workforce.

Friday’s meeting came in the wake of a motion filed in the Agriprocessors bankruptcy case by the meatpacker’s largest creditor, First Bank Business Capital of St. Louis, Mo., claiming that the company should have filed for bankruptcy in Iowa court rather than in New York, where the current case is pending. Attorneys for First Bank contend that Agriprocessors filed as an Iowa business with the Iowa Secretary of State, and they filed as an out-of-state business with the New York Secretary of State.

The court in New York is expected to hold hearings on the motion Monday morning.

Documents filed with the court show three companies with a significant secured interest in Agriprocessors. First Bank is the largest with $35 million. Chicago-based MetLife Agricultural Investments is owed $9.6 million and Minneapolis-based Farm Credit Leasing is owed $6 million.

In addition, Jacobson Staffing Company of Des Moines leads the list of 20 creditors with the largest in unsecured claims with just over $845,3000 in unpaid bills. Weyerhauser of Chicago is a close second with just over $806,900 in unsecured claims. Other notables on the list are Alliant Energy ($318,255); Nyemaster, Goode, West, Hansell & O’Brien law firm ($208,636); U.S.D.A. Food Safety and Inspection ($88,179); and Chicago attorney Thomas V. McQueen ($60,612). McQueen served as counsel for former Agriprocessors supervisor Martin De La Rosa-Loera in a federal immigration-related case.

The list of 20 creditors totals just under $5.6 million. Agriprocessors has estimated that it owes between $50 and $100 million.

A 46-page creditor listing that was filed by attorneys for Agriprocessors in conjunction with the bankruptcy contains creditors from 30 states and the District of Columbia. In addition, the document lists creditors from the nations of Canada and Isreal. Creditors range from the Brick City Inn in Clermont to the Diners Club in The Lakes, Nev. Within the bulk creditor listing, which does not provide dollar amount owed to the creditors, both company founder Abraham Aaron Rubashkin and former executive officer Sholom M. Rubashkin are listed.

GAL Investments, a Postville property management company owned by Gabay Menachem, is one of the companies on the bulk list facing financial demise due to dependency on the Agriprocessors. Although the company has no direct management ties to Agriprocessors, its business was providing housing to rental customers in Postville. Since Agriprocessors was the largest employer in the area — definitely the largest by far for Postville — Menachem’s business depended on employees from the meatpacking plant needing lodging.

Last week, Menachem noted that up to 90 percent of his tenants had not paid their rents. His company, like the others in Postville that had organized to serve or had adapted to serve needs related to the meatpacking plant, has undergone difficult financial times since the May 12 immigration raid at the plant. The latest round of hardship, which includes Jacobson Staffing ending assignments with nearly half the Agriprocessors workforce, however, may be the final blow.

The rural electric cooperative that serves Postville turned off power to many of Menachem’s units this past week for non-payment. On Friday, many of the units without power had bright orange tags from the City of Postville warning that within a minimum of 24 hours water would be cut off if bills were not paid. Given that the electricity to the units also provided heat, the Postville Water Department was likely doing Menachem a favor by reducing the chance for broken water pipes.

“I couldn’t give you an exact figure as to the number of rental properties in town that are vacant,” Jeff Abbas of KPVL Radio said Friday. “I think I can safely say that two-thirds are empty.”

Abbas and other community leaders have been working to ensure that those left in town have basic necessities. Pauluans were thankful for warm winter coats. Some from the tropical island were hoping for monetary help so they could return to their homeland. Other individuals of varying nationalities sought refuge in a building with heat for a night, but many brave the elements as they try to figure out what comes next.

For his part, Menachem has tried to keep the wolves at bay. He argued with the electrical company, explaining that some of the units in jeopardy contained children. When the electrical company could no longer continue to offer their services without payment, Menachem moved families to other units which still had heat and power. Since many, if not all, of the properties have past due utility bills, however, it remains unclear how long such temporary shelters will last.