Postville may face $4 mil bill if Agriprocessors fails
BY TONY LEYS
The city of Postville could be on the hook for more than $4 million if the Agriprocessors meatpacking plant goes under, legal papers filed today show.
The money is the balance of a 20-year federal loan the city took out to build a sewage-treatment plant for the meatpacking company. The company runs the plant and is the source of most of the sewage treated there, but the city technically owns the facility and is responsible for its financing.
The figures are included in court papers the city filed today in a bankruptcy case surrounding Agriprocessors. The company, which used to be the northeast Iowa town’s dominant employer, has been struggling to survive since an immigration raid there last May and the imprisonment of its former leader on bank-fraud charges.
The outstanding debt on the sewage plant amounts to more than $1,700 per person in the northeast Iowa town of about 2,200. In addition to the loan, the court papers say the federal government gave a $3.3 million grant for the sewage-treatment project.
The treatment plant was constructed several years ago as part of a settlement of environmental complaints against the meatpacking company. According to the court papers filed today, the company is supposed to be covering nearly $25,000 in monthly payments on the loan, plus other costs. It is more than $100,000 behind on those payments, the court papers say, and the city also is being pinched by the lack of property-tax and water-service payments from numerous Agriprocessors employees who have been thrown out of work.
The documents were filed as the city joined numerous other creditors, including the state of Iowa, that want the bankruptcy case moved from New York to Iowa.
A lawyer for Agriprocessors did not respond to a request for comment.
Joseph Sarachek, a court-appointed trustee who is temporarily overseeing operations at the meatpacking company, said he is working with the city to make partial payments on bills. The company resumed limited operations last week, and it is in active negotiations with unidentified parties that are interested in buying it, he said.