Bank may have a "different timetable."
No deal: $15 million Agriprocessors bid too low
By JENS MANUEL KROGSTAD, Courier Staff Writer
CEDAR RAPIDS --- Objections Tuesday over the sale price of Agriprocessors by the kosher meatpacking plant's largest creditor derailed a potential deal in bankruptcy court.
Judge Paul Kilburg agreed to revisit the issue next week. The move gives Agriprocessors trustee Joseph Saracheck more time to pursue a higher bid or additional financing to operate the plant.
Kosher Standards LLC raised its bid to $15.7 million in the second day of the Agriprocessors auction, but St. Louis-based First Bank Capital vetoed the deal because it did not receive what it deemed fair value for its assets.
The bank has been financing the operation of Agriprocessors since late last year. Financing could stretch into May, said Dan Childers, attorney for Saracheck. However, he cautioned the bank may have a different timetable. Childers said he could not speculate who might continue to finance the plant if the trustee decides not to sell in the near future.
Lloyd Palans, an attorney for First Bank, declined to comment on the potential sale.
In speaking to the court, Palans praised Saracheck for his efforts but said the deal simply fell short.
"We're at the point where things aren't where we want it or where the estate wants it," he said.
First Bank filed a $20 million credit bid on Monday. Because it is highest bidder and largest creditor, it meant the bank could veto any deal.
MLIC Asset Holding, an affiliate of Metropolitan Life Insurance, filed a $6.5 million credit bid but was ready to accept the deal offered by Kosher Standards.
Included in Kosher Standards' bid was $6.5 million to buy out First Bank's loans to the meatpacking plant, $2.2 million to buy out leases and $7.5 million to buy out MLIC, which owns the plant's land and building.
The identity of the lead bidder remains unclear. All parties declined to give further details of any companies that placed bids.
Natural Source Holdings, a limited liability company incorporated in Delaware last week, ended the day Monday as the leading bidder at $5.5 million. A third bidder, T5 Equity Partners LLC, is an investment firm in Las Vegas that owns the Mall of America in Bloomington, Minn. The firm did not make an offer on Tuesday.
Offers for the plant have come in far lower than expected. Soglowek Nahariya Ltd., an Israeli food company, made a $40 million bid for the plant in January, but the deal fell through a month later.
Federal agents raided Agriprocessors in May and detained 389 workers on charges related to illegal immigration. The plant, Agriprocessors executive Sholom Rubashkin and several managers face a myriad of federal and state criminal charges for hiring illegal immigrants, bank fraud and employing minors.
Agriprocessors filed for Chapter 11 bankruptcy last November.