By Jean Caspers-Simmet
Agri News staff writer
CEDAR RAPIDS, Iowa -- Livestock sellers who weren't paid for cattle sold to Agriprocessors should soon receive their money.
The livestock sellers and poultry growers and poultry cash sellers who filed claims are from Iowa, Minnesota, Wisconsin, Illinois, Indiana and South Dakota.
Joe Sarachek, the Chapter 11 Bankruptcy Trustee for Agriprocessors, filed a motion Jan. 8 with the U.S. Bankruptcy Court seeking authority to pay the claims filed by the livestock sellers under the Packers and Stockyards Act against the bankrupt Postville packing plant.
A telephone hearing on the motion is Thursday.
According to an analysis by the Grain Inspection Packers and Stockyards Administration, valid livestock claims of $2.13 million have been made.
The cash bond for livestock sellers, which Agriprocessors was required to have under the Packers and Stockyards Act, has a value of $1.2 million. Cash proceeds of approximately $7 million are subject to the Packers and Stockyards statutory trust, which includes all the inventory and receivables from the meat and poultry products. Approximately $3.5 million in claims asserted by poultry growers should be validated by USDA within the next several weeks, and Sarachek noted that there are sufficient trust funds to satisfy those claims.
Sarachek asked that the livestock sellers' claims be paid first from the cash bond and then from trust funds. He also asked that Luana Savings Bank, the cash bond depository, turn over the proceeds of the cash bond so that he can use the money to pay the livestock sellers.
Last week, Eric Lam, attorney for First Bank Business Capital Inc., a secured creditor and party-in-interest in the case, filed a response to Sarachek's motion saying that First Bank doesn't oppose the motion. First Bank, however, reserves the right to assert claims "in the nature of subrogation, indemnity or reimbursement against Agriprocessors' estate or any other person responsible for the debtor's failure to comply with the Packers and Stockyards Act if First Bank's claims against Agriprocessors are not paid in full from the proceeds of the remaining assets of the estate," Lam wrote.
According to the Packers and Stockyards Act, livestock producers and poultry growers are first in line to receive money in a bankruptcy proceeding. The livestock and poultry trust is held separate from the company's money.