Agriprocessors Buyer Balks At Paying Bankruptcy Costs, Delays Sale

The "technicality" that delayed the sale may be an attempt by Hershey Friedman to drive the sale price lower.

Agriprocessors sale hits a snag
By Dave DeWitte • The Gazette

A hearing on a sale of Agriprocessors Wednesday failed to gain court approval, after the bankruptcy trustee and prospective buyer failed to reach a purchase agreement.

Attorney Dan Childers said efforts to negotiate a purchase agreement for the court and creditors to consider broke down Tuesday, primarily due to the buyer's concerns with paying costs of administering the bankruptcy.

The two sides instead began formulating a proposed sale order for consideration by the judge that would spell out many particulars of the sale, but the order had not been completed in time for Wednesday's hearing, according to Childers, attorney for bankruptcy trustee Joe Sarachek.

Sarachek filed a motion on June 23 to sell nearly all of the assets of the embattled kosher meatpacking company to SHF Industries LLC, a virtually unknown startup company. SHF was the sole bidder at a subsequent auction for the company’s assets.

The roughly $8 million bid is expected to leave nothing to pay millions owed to unsecured creditors, but Sarachek said in the motion that the sale would keep the company in business, providing them with a future trading partner.

Sarachek’s motion indicated SHF would be required to complete a disclosure statement setting forth any connections between SHF and any creditors or parties in the case, including the current owners of Agriprocessors, and SHF’s future intentions for Agriprocessors’ Postville operations.

In their objection, the unsecured creditors said they have no way of telling whether SHF will make a responsible trading partner, because they know nothing about the company’s owners or their experience in meat processing. The creditors said the lack of a purchase agreement also left them unclear which assets of Agriprocessors SHF is buying.

“By not submitting the proposed asset purchase agreement or the disclosure statement of SHF, the Chapter 11 trustee is in violation of his own bid procedures previously approved by the court,” the committee’s motion said.

Separately, the National Labor Relations Board filed a limited objection to the sale to protect its rights to require collective bargaining with employees at a Agriprocessors distribution center in Brooklyn, N.Y.

The agency said the trustee’s initial sale motion could be read to suggest that the National Labor Relations Board and the courts could not impose a contract bargaining obligations on SHF or any other purchaser of Agriprocessors.

The NLRB recognized the United Food and Commercial Workers Union as collective bargaining agent for the distribution center employees on Jan. 23, 2006, and on August 31 of that year the board found Agriprocessors had violated federal law by refusing to bargain with the union.

The U.S. Court of Appeals entered a judgment requiring Agriprocessors to honor the board’s order on August 31, 2008. A rehearing sought by Agriprocessors was denied.

Companies that leased equipment to the meat processor or performed work on Agriprocessors facilities have also objected to the sale to SHF, saying the bankruptcy trustee’s motions have not addressed the secured debts they are owed by Agriprocessors.

Wednesday's hearing ended without a final sale approval. The trustee and SHF are expected to present a proposed order by Thursday for consideration by Chief Bankruptcy Judge Paul Kilburg.

Previous Post.

Comments

[sage]

This new twist doesn't surprise me at all.

IMHO:

1. Mr. Friedman is simply a mouthpiece on a nice face, being programmed by the secret owners of SHF.

2. Refusal to pay Bankruptcy Costs sounds like typical RCF business practices.

3. Sarachek, as we remember, was being hounded by Heshy during the first Agri auction.

4. Possible attempt to drive the sales price even lower sounds, again, like typical RCF business practices.

5. Friedman, who is claimed to be a honest business person, must be being paid a lot of bucks, to take on this less than stellar assignment.

[moshe p utz]

Shmarya,
Would you by chance be able to post us a pic of smokin joe. I would think once we all get a look at him, wed see what a real shmock looks like. Maybe mr. Smeckel could get ahold of one, if you don't happen to have one.
Were counting on you to deliver the most accurate info ! Maybe sage would think a little different of joe. That guys a jew just like all the other jewish tustees. To milk the cow and screw all of postville the the milk stops flowing. Has anyone ever seen joe in postville, since sage thinks joe is so sincere and cares for the poor people of postville. He aint any better then uncle sholom. He's reckless and wants to personally put agri into chapter 7 !!!! What do the people of postville have to say, once they get screwed by sarachek and all his cronies and leave you guys with 0 !!!!!!

[yidandahalf]

"SHF Industries LLC, a virtually unknown startup company...the sole bidder"

Virtually unknown to everyone but the RCF and the OU.

[sage]

Hey Moshe,

I never claimed that Uncle Joe is on the up and up.

But I did say that compelling evidence needs to be produced, before any criminal indictment against him is issued.

[sage]

+++ "SHF Industries LLC, a virtually unknown startup company...the sole bidder"

Virtually unknown to everyone but the RCF and the OU.

Posted by: yidandahalf | July 16, 2009 at 06:25 AM +++

GREAT POST, my friend!!!!!!!

[Hometown Postville]

This sure reeks of SMR. They're supposed to be killing cows, not milking them! Already getting the business for bargain basement price and now trying to steal it. All the cash better be collected upfront- any deals on the side to pay later won't happen. And Sarachek is making out on this like a bandit! Mooooo!!!!!!

[sage]

LOL!!!!

[FirstGenerationBavarianAmerican]

Not having a signed purchase agreement to present to the judge is not exactly a technicality.

The phrase about "paying costs of administering the bankruptcy" is pretty vague. Does this refer to the commission the receiver gets for brokering a sale of the company under a section 363 sale?

[sage]

Does the purchase agreement have to be signed by the actual owners of SHF, or can Hershey Friedman sign it on behalf of the owners, keeping their identities a secret?

[FirstGenerationBavarianAmerican]

Well, Daniel Hirsch's name is already on the Iowa's SOS database, and is listed as having signing authority. So, what is presented openly in court can still only list the names of the sock puppets.

[sage]

Interesting!!

Then, it seems that the identity of the real owners, is still being kept a secret.

One would assume, for above board transactions, that the actual owners should be signing the purchase agreement, but this seems to be a rather dubious undertaking.

[groisa shmekel]

Dubious? Above board? Sage you got something up ur hershey highway! You read all the filings...wouldn't the AG object to any funny biz? Wouldn't the fbi uncover rcf connections? Do u actually think u r smarter than all these people? you deserve a good ass pounding but then again u would enjoy that! I am amazed at ur sheer stupidity. I bet vusizneias banned u that's why u waste time here now

[AGRI-vated Angel]

[Agriprocessors Buyer Balks]

I am quite certain the Postville community is not interested in Mr. Friedman, now that he has revealed himself as a self-serving man who wants something for nothing. We've been through this before. (As 'they' say - 'Been there, done that.')

[Pablo Faird]

Groisa Shmekel,
Relax, take a chill pill. Sage obviously does not know Hershey Friedman, and is not aware that he never was nor will be a mouth piece or puppet for any one. That is not how he built his successful business enterprises.

[sage]

WOW!!!

The poster at 11:01 AM has an incredible command of the English language.

LOL!!!

[groisa shmekel]

Pablo u da man. U sound like a good man. I doubt u would ever meet sage at the blue oyster. And to the agrivated person - you don't worry about the paperwork is filed. You just do ur job. U obviously feel entitled to the worlds mercy and goodwill...well u aint gonna get it. Any one who is kind enough to save your job is going to make a buck in the process. You think joe cares about you and not himself????? Sage: u = you . Pls address my content not my spelling...idiot

[Pablo Faird]

AGRI-vated moron,
First of all Postville does want the plant to succeed. Second, maybe Mr.Friedman is protecting himself from being taken advantage of in the dying moments before closing the deal. Get the facts before posting, you dumb schmuck.

[sage]

Hi PF,

If Hershey was being completely above board, his name would be listed in the Iowa SOS Corporation Database. It's not, nor are the names of the owners of SHF.

The only name available is that of Daniel Hirsch, as reported by FGBA earlier today.

[Pablo Faird]

Hi Sage,
Ask, Bill Gates, Paul Reichman, Norm Turner, etc.. (hell, even ask Groisa Shmekel) if their names appear on all of their holdings.
In this day and age with the way the legal systems are in place everybody needs to protect themselves to varying degrees.

[groisa shmekel]

Why do u think your business acumen, or lack thereof is the barometer to measure above boardness? There are infinite reasons to structure a company. Your lack of business knowledge is evident.

[state of disgust]

Pablo Faird/groisa schmekel - who are these new masked men? Sounds like Agri plants.

One of the purposes of a public sale is transparency when the public interest is at stake. Seems to me someone is going to a lot of trouble to obscure information.

BTW, I beleive the costs that SHF object to paying is Joe Sarachek's bill!

[sage]

+++ One of the purposes of a public sale is transparency when the public interest is at stake. Seems to me someone is going to a lot of trouble to obscure information. +++

EXCELLENT POINT, SOD!!!

[AGRI-vated Angel]

[Pablo Faird]

Let me make this perfectly clear . . . we only support the facility to the point it is a positive experience-(Pro-Postville). We do not care about the success of the plant itself or the success of its owner. This is a mutual response . . . given the self-interested parties: re - behaviors characteristic of the owners/supervisors affiliated with Agriprocessors.

In other words . . . when we cared, we were taken advantage of.

[state of disgust]

Agri-vated:
An appropriate response. Once burned,twice shy.
I'm hearing more abour Rubashkin bringing in basar from Uruguay. Anyone else hearing the same reports? Anyone in Brooklyn seeing their labels?

[sage]

Yes.

This has been known for quite some time.

Question: Is this activity violating any Bankruptcy Laws?

[moshe p. utz]

Yes they do bring in meat from South America, I am surprised you shmocks just realized this, with all your knowledge as to what is going on with Rubaskin. That is why I keep saying, he doesn't need the dirt from postville, he is making truckloads just bringing in from SA. People of postville, rubaskin does not need you, get that into your heads. That is why I emphasize, work with Danny boy. You got nothing to lose but your job ! Your morale is in the shi...s , time to take your head out of your as..

[Concerned for the Postville area..]

People of postville, rubaskin does not need you, get that into your heads.
Posted by: moshe p. utz | July 16, 2009 at 04:00 PM

Then why is he and his clan still here? We certainly don't need him and Agri! He has forever tainted our town and its reputation. We are not forgiving of his bankrupting the town and leaving the residents to pick up the pieces. I don't know what truck you fell off of but your crazy if you think we are going to open our arms and minds to a new scam with the same players. Shut it down, load it up and move it on!!!!!
PS
quit calling everyone "shmocks" and insulting anyone whom blogs. Your ignorance is shining thru........

[sage]

Hi CPA,

These clowns come out from the woodwork, from time to time, especially when things don't look too good for the RCF.

It's best to completely ignore their mad rantings and continue on with the topic under discussion.

[Concerned for the Postville area..]

Sage,
Your correct, they like to dish it out but can't take anyone elses opinions.

[sage]

Hi CPA,

The Feds have made our day!!!

SMR has just been indicted for additional charges of mail and wire fraud.

This has just been posted.

Let's see what kind of mad rantings come out from the woodwork.