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Agriprocessors facing foreclosure

November 3, 2008

Agriprocessors is facing foreclosure after defaulting on a $35 million loan.

First Bank of St. Louis, in a lawsuit filed Oct. 30, initiated foreclosure proceedings against the ailing kosher meat producer, the Forward reported. A temporary receiver has been appointed for the company’s assets. A hearing in federal court is scheduled for Wednesday.

According to the lawsuit, Agriprocessors and its owners took out a $35 million loan, putting up personal property as collateral. The bank claims that the company has bounced checks worth $1 million and that the electricity at its plant in Postville, Iowa, was due to be shut off Monday.

“The termination of electric service could result in the spoilage of millions of dollars in fresh and frozen meat products,” the lawsuit states. “In addition, First Bank is informed and believes the millions of chicks and chickens in the Borrowers’ inventory are in danger of starving to death.”

News reports trickling out of Postville, the site of Agriprocessors’ largest meatpacking plant, confirm those warnings. On Sunday, the Forward reported that about 1,000 turkeys had been found unattended in trailers near the packing plant, apparently without food or water. They were still there the next morning.

Agriprocessors’ troubles have intensified in recent days with the arrest of Sholom Rubashkin, the son of the company’s owner, on charges that he helped procure false documentation for illegal workers at the plant. Also last week, Iowa’s labor commissioner hit the company with nearly $10 million in fines for wage violations.

Company representatives have not responded to several requests for comment.

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