Can Agriprocessors Trustee Be Trusted?
If this quote from the NY Jewish Week is correct, I'd say the answer to that question is…
…probably not.
Since chicken production resumed, [Agriprocessors trustee Joseph] Sarachek said kosher chicken prices have dropped "to a more reasonable level."
Missing from Sarchek's equation is Empire Kosher – which increased its production by 50% and lowered its prices significantly November 16, eleven days after Agriprocessors declared bankruptcy, after Agriprocessors missed its payroll obligations and drastically scaled back production, and two days after Sholom M. Rubashkin was arrested on bank fraud charges.
Agriprocessors "increased production" is a drop in the bucket compared to what Empire produces.
And then we have this:
Although there are members of the Rubashkin family at the Iowa plant,
Sarachek said they are not in control of the operations. The Rubashkin
family owns the plant and is hoping to find a buyer. It rejected a $50
million offer late last year and Sarachek said the Rubashkins are now
"negotiating with multiple parties" who are also interested in buying
it.
How I missed all this two weeks ago, I don't know…
Agriprocessors' Chicken Production Up
Stewart Ain
The NY Jewish Week, Jan 23, 2009
Chicken production at Agriprocessors, the embattled kosher slaughterhouse in Postville, Iowa, is now up to 20,000 daily--about one-third its previous output and beef production is expected to soon resume.
"I have two experienced meat industry veterans operating the plant and all operational decisions are made under the trustee's auspices," said Joseph Sarachek, the company's court-appointed trustee.
Agriprocessors filed for Chapter 11 bankruptcy protection in November. It ceased operations at about the same time, owing between $50 million and $100 million. Its assets at the time were estimated at between $100 million and $500 million.
Sarachek said chicken production resumed early last month and that "we are also placing eggs for the development of chickens in the future, and we are processing pastrami and corned beef."
Sarachek said plans call for the plant to begin slaughtering cattle again by Passover, which begins April 8, "and for that to happen we have to start well before then."
Since chicken production resumed, Sarachek said kosher chicken prices have dropped "to a more reasonable level."
Agriprocessors had had 40 percent of the kosher poultry market and 60 percent of the kosher meat market before it ran into legal problems. Federal authorities raided the plant in May and arrested nearly 400 workers for alleged immigration law violations.
Rabbi Sholom Rubashkin, 49, the company's CEO, was also arrested and charged with conspiracy to harbor undocumented aliens for profit and with bank fraud. He is being held without bail awaiting trial.
Sarachek said Agriprocessors plans to process "as much glatt [meat] as possible" when it resumes production. He noted that glatt meat prices have risen 40 to 50 percent since Agriprocessors ceased production.
Cattle slaughtering will resume, Sarachek said, once the company is able to obtain another bank loan to be able to buy cattle.
"You have to pay cash," he said, adding that the company is working with First Bank of St. Louis to obtain a new bank loan. It already has a $5 million loan from the bank.
Agriprocessors, which once employed 1,000 workers, now has a workforce of 300 primarily former employees and Sarachek said all comply with U.S. immigration laws.
Although there are members of the Rubashkin family at the Iowa plant, Sarachek said they are not in control of the operations. The Rubashkin family owns the plant and is hoping to find a buyer. It rejected a $50 million offer late last year and Sarachek said the Rubashkins are now "negotiating with multiple parties" who are also interested in buying it.
Stewart Ain
The NY Jewish Week, Jan 23, 2009
Chicken production at Agriprocessors, the embattled kosher slaughterhouse in Postville, Iowa, is now up to 20,000 daily--about one-third its previous output and beef production is expected to soon resume.
"I have two experienced meat industry veterans operating the plant and all operational decisions are made under the trustee's auspices," said Joseph Sarachek, the company's court-appointed trustee.
Agriprocessors filed for Chapter 11 bankruptcy protection in November. It ceased operations at about the same time, owing between $50 million and $100 million. Its assets at the time were estimated at between $100 million and $500 million.
Sarachek said chicken production resumed early last month and that "we are also placing eggs for the development of chickens in the future, and we are processing pastrami and corned beef."
Sarachek said plans call for the plant to begin slaughtering cattle again by Passover, which begins April 8, "and for that to happen we have to start well before then."
Since chicken production resumed, Sarachek said kosher chicken prices have dropped "to a more reasonable level."
Agriprocessors had had 40 percent of the kosher poultry market and 60 percent of the kosher meat market before it ran into legal problems. Federal authorities raided the plant in May and arrested nearly 400 workers for alleged immigration law violations.
Rabbi Sholom Rubashkin, 49, the company's CEO, was also arrested and charged with conspiracy to harbor undocumented aliens for profit and with bank fraud. He is being held without bail awaiting trial.
Sarachek said Agriprocessors plans to process "as much glatt [meat] as possible" when it resumes production. He noted that glatt meat prices have risen 40 to 50 percent since Agriprocessors ceased production.
Cattle slaughtering will resume, Sarachek said, once the company is able to obtain another bank loan to be able to buy cattle.
"You have to pay cash," he said, adding that the company is working with First Bank of St. Louis to obtain a new bank loan. It already has a $5 million loan from the bank.
Agriprocessors, which once employed 1,000 workers, now has a workforce of 300 primarily former employees and Sarachek said all comply with U.S. immigration laws.
Although there are members of the Rubashkin family at the Iowa plant, Sarachek said they are not in control of the operations. The Rubashkin family owns the plant and is hoping to find a buyer. It rejected a $50 million offer late last year and Sarachek said the Rubashkins are now "negotiating with multiple parties" who are also interested in buying it.
Big surprise, I never saw the lowered chicken prices from Empire on my chickens. THen again, I didn't see them go up either.
Posted by: yo | February 05, 2009 at 04:38 PM
Shmarya,
He's actually right. At my local grocery store, chicken prices are now $2.99 lb. In early January when only Empire and David Eliot were available, it was $3.29 lb.
Before Agri got caught, it was $2.29 lb.
Is it different where you are??
Posted by: Yankele der ganiv | February 05, 2009 at 05:38 PM
The price decreases are mostly due to reduced transportation costs and Empire's increase in production.
Agri is selling mostly in South Florida, Brooklyn and in Chabad communities.
Posted by: Shmarya | February 05, 2009 at 05:41 PM
**seems to be** selling mostly in…
Posted by: Shmarya | February 05, 2009 at 05:42 PM
Face reality, the $50 to $100 million dollars they are in debt and can't seem to account for was money laundered to Isreal. This scam was well played, I have to admit. The Rubaskins are no dummies and fall into the same catagory as the Gambino and Gotti "family business". Only difference is they are Jew and not Italian.
Posted by: Sarg | February 05, 2009 at 05:45 PM
All the more justification for full-blown RICO Charges.
Posted by: sage | February 05, 2009 at 06:12 PM
"Although there are members of the Rubashkin family at the Iowa plant, Sarachek said they are not in control of the operations."
How would Sarachek know?
He's not in the plant more then a day/week himself. His crackerjack staff knows nothing of the business, and his two "experts" never seem to be around either.
Posted by: Max | February 05, 2009 at 08:17 PM
I don't know what to make of this story. It would be fun to ask the trustee if had any comment on this story, and if was quoted accurately.
The Rubashkins are not debtors in possession. About this 50 million dollar offer they refused, was it before or after they declared bankruptcy? If there is that $40 million stalking horse bid, why would anybody negotiate with Rubashkin? They would simply go into bankruptcy court and try to pay as little as possible.
Posted by: FirstGenerationBavarianAmerican | February 05, 2009 at 10:53 PM
I don't know why everyone is so surprised. The trustee is in it for the business too. He or his company gets a percentage of the sale price of Agri. That is bankruptcy law. You think he is doing this because he is a 'good samaritan'? He will anything he can and say whatever he can say to get the highest price so that his % amount increases too. That doesn't make him a bad person...just a shrewd business man.
Posted by: this is how it works | February 06, 2009 at 09:10 AM
Going forward, I have not seen anyone publicize how much Mr. Sarachek is going to be compensated for selling the company. 11 U.S.C. Section 326 specifies MAXIMUM compensation for Chapter 11 trustees, but the actual form and amount of compensation is determined by the bankruptcy court handling the case. The higher the selling price, the more money the unsecured creditors get.
Posted by: FirstGenerationBavarianAmerican | February 06, 2009 at 01:10 PM
Sed quis custodiet ipsos custodes?
But who shall guard the guardians?
Juvenal (a delinquent, LOL).
Posted by: Yochanan Lavie | February 08, 2009 at 11:45 AM
To Max:
The Trustee is at the plant 4 days a week. Where in the world do you get your information from?
Posted by: Sophia | February 10, 2009 at 01:54 PM