Agriprocessors Seeks Bankruptcy Protection

One of the nation's largest kosher meat producers is seeking Ch. 11 bankruptcy protection. Agriprocessors, which produces kosher meat under the Aaron Rubashkin label and is sold at supermarkets nationally such as Albertson’s, Kroger, Shop Rite, Wal-Mart, Trader Joe’s, Ralph’s, Pathmark, and H.E. Butt, was the focus of an immigration and customs investigation that revealed 300 workers were illegal aliens. There were also allegations of child labor law violations, which were referred to the state's attorney general.

In its filing, the company blamed the May 12 raid:

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.

This will have a significant effect on kosher food availability in some parts of the country and may lead to higher prices for kosher meat.