The Des Moines Register has the money quote from Joseph Sarachek, Agriprocessors' court-appointed trustee:
Quantum Partners would pay all debts owed to the St. Louis-based bank by Dec. 31, and would join forces with the Rubashkin family and operating trustee Joseph Sarachek to pay any remaining debts and government fines, according to the letter written by firm principal Marxx Theresias. Quantum Partners is “financially equipped and extremely serious” about closing the deal, Theresias wrote.
But Sarachek, a New York lawyer who is serving as the company’s bankruptcy trustee, called Quantum’s offer “a half-baked proposal.”
The Gazette nabbed an interview with Marxx Theresias, VP of Quantum Partners, the so-called investor:
Marxx Theresias, a principal in Quantum Capital who wrote the letter, told The Gazette he is aware of Agriprocessors' legal entanglements, but got the impression during a meeting with the Rubashkin family that any legal violations were not intended.
Quantum was approached with the deal by an experienced management group interested in operating Agriprocessors, Theresias said. The management group has a wealth of experience.
"They gave us a warm fuzzy feeling," Theresias joked. He said Quantum primarily invests in commodities and in troubled real estate. In the latter, he said Quantum brings in fresh capital and management to help turn the investments around.
Theresias was reluctant to describe his company as a white knight investor.
"I don't believe in white knights," Theresias said. "We are investors, and in business to make money."
If the investment doesn't achieve a turnaround, Theresias said the deals are structured so that Quantum typically takes over the position of the distressed owner or other party.
The controversy of Agriprocessors' situation was clearly not lost on Theresias, who said "this could become a media nightmare."
But Theresias said the deal could satisfy the interests of the key stakeholders, particularly the City of Postville and First Bank Business Capital.
Theresias said the hardship that the shutdown of Agriprocessors has caused in Postville is recognized by his company, and he expects that the city will support its efforts to bring Agriprocessors back to operation and profitability.
But the Waterloo-Cedar Falls Courier has more from Sarachek along with an idea of how this may effect the bankruptcy:
"I will tell you I have numerous other potential buyers who [unlike Quantum] have not conditioned their offer on a New York venue and Rubashkin ownership," [Sarachek] said.
On Thursday, the U.S. Attorney's office for the Northern District of Iowa sought to seize Agriprocessors' assets as part of its criminal indictment of the company. The trial is tentatively slated to begin Sept. 8.
Sarachek's bankruptcy attorney, Dan Childers, of Elderkin & Pirnie in Cedar Rapids, said he believes the forfeiture claim will not scare away potential investors.
Even if the government wins a conviction next fall and moves to seize company assets , he said, under bankruptcy code it will have to stand in line behind other creditors.
"Someone unfamiliar with the process might look at (the forfeiture claim) more unfavorably. I'm hoping whoever is looking at a potential purchase will have good counsel and see it as no threat to a buyer," he said.
Sarachek said if he finds an investor, the bankruptcy court will determine what claims, if any, the government has on company assets. In addition, he said he believes the court will not award the government any assets in possession of the new owner.
"The forfeiture claim certainly spooks employees. It's unfortunate," he said.
Quantum Partners and its many like-named companies appear to be nothing more than shells.
And the money Quantum offered to buy into Agriprocessors? Where does it really come from?
If it Quantum really is a shell, and if the money is, shall we say, less than clean, hear three possibilities:
1. Rubashkin money returning from overseas accounts.
2. Money washed and then used to reenter the economy in cash intensive businesses.
3. Money from crime syndicates.
4. Some combination of the above.
My bet is on number four, but with number one included as a given.
Meanwhile, the Iowa Independent reported Friday that Agriprocessors' bankruptcy case has finally been moved to Iowa.
Quite a lot of news for Friday in December.