Agriprocessors files for bankruptcy - KWWL - Eastern Iowa Breaking News, Weather, Closings

Agriprocessors files for bankruptcy

POSTVILLE (KWWL) -- Iowa kosher slaughterhouse, Agriprocessors has filed for bankruptcy, blaming May immigration raid for problems.

The move to file for Chapter 11 bankruptcy protection on Tuesday came a day before Agriprocessors was to meet in court with its biggest lender, First Bank of St. Louis.

The bank is seeking to foreclose on the plant in Postville and appoint a third party to oversee Agriprocessors' assets.

The bankruptcy filing says Agriprocessors owes $50 million to $100 million to creditors.

The plant was the site of a May 12 immigration raid in which 389 people were arrested.

A lawyer for the company did not immediately return a call Wednesday seeking comment.

Filing chapter 11 bankruptcy is generally a sign that a company is trying to stay in business rather rant sell off assets to repay debt.

Many employees and community members hope the plant, the largest employer in Postville, can stay in business whether with current or new owners. Many longtime residents worry if Agriprocessors closed, the town wouldn't survive. Since the may raid, hundreds of workers have cycled in and out of town including a large group from the island of Palau. They hope Agriprocessors will get through these financial troubles so they can stay in Postville.

"It does worry me because they could shut this plant down, and then we'd be jobless and then after that we'd be homeless," said Joanne Obak, an Agriprocessors worker. "I do have faith that everything will be back to normal and back the way it should be."

Another group heavily impacted and anxious to see what might happen is the local businesses with contracts with Agriprocessors. With chapter 11 filing, the court can give full relief to Agriprocessors, meaning companies Agriprocessors owes money to aren't sure when they might get their money.

Already, an Agriprocessors plant in Gordon, Nebraska closed because of the company's financial trouble.

Agriprocessors is also slated to go on trial in April of next year on more than 9,000 charges of child labor law violations.

Online Reporter: Jamie Grey

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