Agri Star Asks Court To Declare It Doesn't Owe Taxes

The owner of the Agri Star kosher meat processing plant in Postville is asking a judge to declare that it doesn’t owe Allamakee County a tax debt of $577,872.73 . SHF Holdings LLC filed the motion Thursday in United States Bankruptcy Court for the Northern District of Iowa. The county has scheduled a tax sale on the plant property for Monday.

Agri Star asks court to declare it doesn’t owe taxes

Dave Dewitte • EasternIowaBusiness.com

The owner of the Agri Star kosher meat processing plant in Postville is asking a judge to declare that it doesn’t owe Allamakee County a tax debt of $577,872.73 .

SHF Holdings LLC filed the motion Thursday in United States Bankruptcy Court for the Northern District of Iowa. The county has scheduled a tax sale on the plant property for Monday.

SHF Holdings is the owner of Agri Star, which now operates the former Agriprocessors kosher meat plant that collapsed in the legal fallout of a huge immigration raid. SHF says the property taxes arose during Agriprocessors ownership of the plant.

The petition seeks a declaratory ruling that SHF doesn’t owe the taxes because of terms of a court order in which it bought the property and other assets of Agriprocessors Inc.

“As the bankruptcy order provided, the sale was free and clear of any and all liens, claims and encumbrances,” SHF attorney Shalom Jacob said in a prepared statement. “It is our position that SHF Holdings is not responsible for any unpaid taxes that were accrued under the previous owners.”

Entrance to the Agri Star Meat & Poultry plant in Postville.

Jacob said the petition asks the court to determine who is responsible for the taxes.

An attorney hired to represent Allamakee County in the tax matter said on June 10 that property tax debt  represents a senior lien against property that “follows the real estate.” He said the bankruptcy ruling doesn’t strip away the lien

Attorney Wesley Huisinga of Cedar Rapids added that the county never received notice from the bankruptcy court that the property was being sold free and clear of liens.

In the petition, SHF argued that it believes Allamakee County had  knowledge of the proceedings at each stage in the process. Despite widespread media coverage of the bankruptcy action, it said Allamakee “took no action at any time to protect its interests.”

The bankruptcy court had no money from the sale to divide among the county or other creditors because SHF bought the property through a “credit bid,” buying the interest in the property of  the largest secured lender. The court order directing the sale of the plant does not appear to address property taxes specifically.

Jacob said through a spokesman that SHF hopes the county will delay the tax sale until the court rules on the petition.

SHF would still have 18 months in which to pay the taxes, penalties and interest if a judge rules it owes the money before it would be in danger of losing the property.  Jacob expects the petition for declaratory judgement to be decided within that time period.

[Hat Tip: NeighborGirl.]

Comments

[Hometown Postville]

Why did Allamakee Co wait so long to bring this up?

[FirstGenerationBavarianAmerican]

Well, a review of the original Agriprocessors bankruptcy filing prepared in New York did not list Allamakee County as a creditor, and their name is not on the creditor matrix (list of creditors). The City of Postville is listed, however.

The Des Moines Register has an excellent reference page for Agriprocessors:
http://www.desmoinesregister.com/apps/pbcs.dll/section?
category=NEWS&theme=POSTVILLE_ICE_RAID&template=theme

Here is a corrected link for the original Agriprocessors bankruptcy filing:
http://www.desmoinesregister.com/assets/
pdf/AgriprocessorsBankruptcy.pdf

Contrast this filing with the one for Nevel Properties:
http://failedmessiah.typepad.com/failed_messiahcom/2009/03/
breaking-nevel-properties-files-bankruptcy.html
The county leads this alphabetical list of creditors.

I don't know why the county wants to spin the wheels of people by offering to sell them Agri Star's property. The deal will never close, thanks to the bankruptcy court's sale order. Its a new variation of the Brooklyn Bridge sale scam. "Have I got a slaughterhouse to sell to you".

[justice seeker]

Maybe one of our legal experts can weigh in. If the Rubashkin's New York Attorneys never listed the county as a creditor, and they were hence excluded from the the bankruptcy proceedings, it seems as though the debt was not discharged? I think it was probably a Rubashkin ploy to cloud the sale! Just what we need another Rubashkin conspiracy.