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Agriprocessors bankruptcy update
The Chapter 11 bankruptcy filing by Postville meatpacking plant Agriprocessors is slowly making its way through the New York courts. Creditors, primarily located in the Midwest, have filed motions with the court to move the proceedings from the east coast to Iowa, but the court is not expected to make a ruling on that motion until late this month.
Documents filed with the court indicate that Agriprocessors has until the close of business on Monday to file its reponse to the motions to change venue. An evidentiary hearing has been scheduled for Nov. 25.
The original motion to change the venue from New York to Iowa was filed last week by First Bank Business Capital, Inc. Agriprocessors has allegedly defaulted on a $35 million loan from the creditor, and it is speculated that a suit filed in Iowa by First Bank was the catalyst that prompted Agriprocessors to begin their own Chapter 11 case.
Since the motion was filed, two additional creditors have also filed documents with the court in support of moving the case back to Iowa. MLIC Asset Holdings LLC, doing business as MetLife Ag Investments of Overland Park, Kan., filed their intent to join the motion on Nov. 10. Two days later the Ohio-based National City Commercial Capital, LLC joined the motion to change venue.
MLIC contends in its court filings that Agriprocessors owes approximately $9.6 million in loans that originated through MetLife and were handled by the group’s West Des Moines office.
National City, an equipment leasing company, told the court that Agriprocessors has entered into 10 leases, totaling roughly $2.9 million. In nine of those agreements the equipment in question is located at the Postville meatpacking plant. Equipment from the tenth lease is believed to be located at Local Pride, the now closed Gordon, Neb. site also owned by Agriprocessors.
All of the creditors point to news reports about Agriprocessors and corporate filings by Agriprocessors as proof that the business is headquarted in Iowa and not in New York. The creditors further contend that to keep the venue in New York would cause hardship on the creditors who must pay attorneys to travel to the east coast, and file necessary paperwork with the court if they are not licensed in that state.