NEW YORK ( JTA) – Production at the Agriprocessors facility in Iowa has been halted, a spokesman confirmed.
Chaim Abrahams said Monday that company executives were in New York for a hearing on the kosher meat producer’s bankruptcy filing and hoped to resume production Thursday. Abrahams told the Des Moines Register that the company had struck a deal with First Bank Business Capital, a St. Louis bank that initiated foreclosure proceedings against the company for defaulting on a $35 million loan.
The bank had sought to have the court prevent Agriprocessors from spending any money until its debts were cleared up. Agriprocessors claimed a cash freeze would force it to halt all operations.
On Monday, a judge appointed a trustee to oversee the case, the Register reported. Abrahams said the details would be worked out this week and that poultry production would resume Thursday.
Agriprocessors was the target of a massive federal immigration in May, but in recent weeks its troubles have multiplied, leading to a Chapter 11 bankruptcy filing on Nov. 4.
Several companies have filed lawsuits against Agriprocessors besides First Bank. The former Postville plant manager, Sholom Rubashkin, was arrested twice and is now being held in federal custody on multiple charges.
Rubashkin, the son of the company owner Aaron Rubashkin, stands accused of helping illegal employees procure fake work documents and orchestrating an accounting scheme that permitted the company to borrow more money than it had collateral to cover. If convicted, Rubashkin faces more than 50 years in jail.
Company representatives did not respond to multiple requests for comment.
Agriprocessors’ production woes add to an already unstable market for kosher meat. Retailers, restaurants and customers across the country have reported shortages and price increases.
On Sunday, the market received a dose of good news when Empire Kosher Poultry, a major producer in Pennsylvania, announced it would be increasing production by 50 percent. The increase will go into effect next week, as will a 10 percent reduction in the price of boneless chicken breasts.
“Empire is proud to be able to step up to the plate and be sure that consumers throughout the United States have easy access to kosher poultry at their local supermarkets and butcher shops," said Greg Rosenbaum, Empire’s chairman and CEO. "We are extremely grateful for the cooperation of our kosher certifying agencies, the OU, KAJ and Star-K, as well as the United Food and Commercial Workers Union to make this rapid expansion possible."