Objections To Agriprocessors Sale Filed, Hearing Today

Today's hearing should determine whether the sale of Agriprocessors to SHF / Hershey Friedman is approved.

All the objections listed below are normal for a sale like this.

The claim that Sarachek had to show SHF's disclosure statement to creditors is, I believe, incorrect. The disclosure statement was mandated by the US Attorney in return for not seizing Agriprocessors assets with forfeiture – an option the US Attorney still has if the disclosure statement and his own investigation show a Rubashkin - Friedman link.

Agriprocessors sale faces many objections at hearing today
By Dave DeWitte • The Gazette

A hearing on a sale of Agriprocessors today appears unlikely to produce a quick ruling, given powerful objections from the National Labor Relations Board, the unsecured creditors committee, and others.

Bankruptcy Trustee Joseph 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.

“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 impose a union contract for employees at a Agriprocessors distribution center in Brooklyn, N.Y.

The agency said the trustee’s initial sale motion old 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.

[Hat Tip: Neighbor Girl.]

Comments

[sage]

+++ “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. +++

If the "Unsecured Creditors' Committee" Legal Counsel made the above statement to the Court, and what is in the statement is true, then the Documents needed by the AG were due to be presented at this hearing, by mutual agreement between Sarachek and the Court.

[Shmarya]

No.

The filing is made as part of a deal with the US Attorney.

[sage]

Then the statement made by the Legal Counsel for the "Unsecured Creditors Committee" was either misleading or an outright lie.

You are correct, that the AG Documents are normally presented to the AG after the Court Hearing on the sale, but, in this case, IMHO, due the the nature of past RCF behavior, these were agreed to by Sarachek and the Court to be presented at this time.

Again, either the "Secured Creditors Committee" Counsel told the truth, or misleaded/lied to the Court.

If you could get your hands on the agreement that Sarachek made with the Court re; this, it would be very helpful.

[Shmarya]

It's what I said. The US Attorney vets the sale. Any creditor can object for any reason, just like in any other bankruptcy. But that has nothing to do with their legal right to know.

[sage]

Then we'll simply have to see how things develop.

[michael ben drosai]

yo sage

be honest for a moment. Do you have the slightest clue about what's going on here or you typing for the sake of typing?

"You are correct, that the AG Documents are normally presented to the AG after the Court Hearing on the sale, but, in this case, IMHO, due the the nature of past RCF behavior, these were agreed to by Sarachek and the Court to be presented at this time."

Whatever are you talking about? Now you're even putting words in Shmarya's mouth. What does the AG HAS to do with any of this?

"Then the statement made by the Legal Counsel for the "Unsecured Creditors Committee" was either misleading or an outright lie."

Why does it have to be either? Have you ever heard of advocacy? Both sides assert their respective positions and the court decides (in this case more as a matter of law then as a matter of fact) the extent of the trustees obligation to provide the disclosure and the extent of the prejudice, if any for nondisclosure.

In other words, in the real world where most people live not everything is as black and white as you would have it be.