Rubashkin's 'former' PR flack 'reports' on the 'sale' of Agriprocessors.
Menachhem Lubinsky, Kosher Today, June 1, 2009
New York…With each passing day, there are signs that the bankrupt Agriprocessor may soon be on the comeback trail. The company, operated by a bankruptcy trustee, for the first time took out full page ads in several Jewish newspapers for its poultry line, the only production that has been occurring at the Postville IA plant. KosherToday has learned that after a failed auction, the company may have already been sold to a group of investors who previously managed to overcome a major obstacle for a sale. The undisclosed company is said to have bought a $10 million credit line paving the way for the plant's sale. The source told KosherToday that the investors “cracked the big nut by buying out First Bank Business Capital's loan to Agriprocessor for an undisclosed amount.” Agriprocessor filed for bankruptcy in November, almost six months after federal immigration agents raided the plant and arrested 389 workers. The bank initially sought to recover most of the $37 million it had lent the company, (“and probably could have gotten it earlier," the source told KosherToday) but it is said to have received only a fraction of that amount.
With word that the company will be managed by new ownership at some point in the not too distant future, many in the kosher industry were speculating whether the company could make a comeback to its former position. Several sources told KosherToday that the new owners will find “a totally different landscape” with some markets “having an abundance of product” while other small markets have totally given up on carrying kosher meats. In the end, most ventured a guess that an initial comeback would have to be based on the old model of price. Many in the industry had always blamed Agri for keeping prices artificially low due to its business model and “religious desire to supply kosher meat to the masses.” In time the new owners will have to carve out a very quality oriented unique brand that may give them a shot at recovering their former leadership position, the sources opined.
1. The $10 million line of credit extended to the trustee is different from the $35 million extended to Agriprocessors under Rubashkin. There are separate deals.
2. First Bank still has its claim on that $35 million.
3. There is no sale. There is nothing on Pacer, the federal governments court document site, to indicate a sale is about to happen or has happened, and any sale must be done through bankruptcy court and be approved by the judge, meaning the notice of hearings required to do this along with other documents must be posted on Pacer. None are.
4. After a potential sale has been submitted to the court for approval, the US Attorney needs to vet that buy to make sure there are no ties to the Rubashkin family or to criminal elements.
5. In short, what Lubinsky wrote is both ignorant and irresponsible. It is nothing more than the spin being circulated by this potential buyer, Hershey Friedman – whose name was first published on FailedMessiah.com. Over the past fiew weeks I received emails from people claiming just what Lubinsky wrote. Lubinsky's "source" appears to be one of those Friedman flacks.
6. This type of crude spin is profoundly unfair to the people of Postville and to Agriprocessors workers. It is also unfair to the trustee, Joseph Sarachek, who is made to look like a conspirator in a criminal act. Say what you will about Sarachek, but he cannot sell the plant on the sly, nor can he make a judicial decision or do an investigation for the US Attorney.
7. Is the plant about to be sold? Sarachek says he's been close to a sale and he may be again. But that sale will have to follow an orderly process. It cannot be some haredi backroom deal.
8. The real lesson of stories like Lubinsky's is that they reveal the inherent corruption in the haredi community. Normal people expect the process of law to followed. Haredim expect that process to be evaded. That is why a sale to any haredi entity or individual is problematic, and that is why Postville would be much better off with a sale to ConAgra, Swift or any other corporation not controlled by the Menachem Lubinsky's and Hershey Friedmans of this world.