The court filings are posted below.
By Dave DeWitte
CEDAR RAPIDS — A $40 million offer from an Israeli food company has begun the bidding for the assets of Agriprocessors in bankruptcy.
Soglowek Nahariya Ltd. has made the offer for the kosher meat packing company in Postville, which became mired in legal and financial troubles after an immigration raid in May 2007 snared about one-third of its work force.
Bankruptcy trustee Joseph Sarachek filed a motion in U.S. Bankruptcy Court Sunday seeking approval of a bankruptcy sale process based on the Soglowek bid.
"The trustee believes that the offer is fair and reasonable," the motion stated. "The offer enables the trustee to proceed with an auction process, which he submits provides the estate and its creditors with the best means to maximize the value of the assets."
Soglowek officials were not immediately available for comment. Dan Childers, an attorney for the bankruptcy trustee, indicated the trustee is hoping for an auction date in mid to late May to sell the Agriprocessors assets.
At least 12 companies have been interested enough in buying Agriprocessors to sign confidentiality agreements with the trustee. If a different company outbids Solgowek at the auction, Soglowek would be entitled to receive a $2 million breakup fee and reimbursement of up to $500,000 from the bankruptcy estate under an agreement proposed to the court.
Chief Bankruptcy Judge Paul Kilburg expressed some relief at Monday's hearing that an impending sale will curtail the ongoing expenses of administering the bankruptcy.
Childers said the trustee was seeking court approval to run the company for one additional week while details for a long-term financing plan are worked out with the First Bank Business Capital of St. Louis.
In an ideal case, Childers said the buyer would like to see the company operating with 1,000 employees and a million dollar's worth of cattle per day when the sale closes. He said the question is how much the trustee can ramp up operations without borrowing a lot more money.
Please click the icon on the upper right corner of the Scribd viewer to enlarge and read the entire 56 page court filing by Agriprocessors' trustee. Click the x in the upper right corner to return to this post.
Update 4:55 pm – The Des Moines Register adds:
Still, Sarachek portrayed the new offer as an opening bid in what will essentially be an auction for the Postville plant and a smaller, subsidiary plant, called Local Pride, in Nebraska. He predicted it would be a few months before a sale is completed and a new owner takes over.
Rumors had swirled for several weeks that Soglowek was among possible buyers of Agriprocessors. Earlier this month, Chief Executive Officer Eli Soglowek responded to a request for comment with an e-mail that said his firm had looked at the company but was not making an offer. “We couldn't reach any sound ground for understanding with the trustee and the bank involved,” he wrote then. He could not immediately be reached for comment today.
The Postville plant once was the dominant employer in the region around Postville. Sarachek reopened its chicken production line after the plant closed for a few weeks last fall. He said today that he still is trying to reopen the beef-production operation, which is more complicated.
Agriprocessors' first potential buyer: 1, 2.
Soglowek: 1, 2.