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Problems arise in Agriprocessors?' bankruptcy filing(Gazette, The (Cedar Rapids, IA) Via Acquire Media NewsEdge) Nov. 8--Agriprocessors' bankruptcy case is off to a rocky start. The company's main lender filed a motion Thursday saying the bankruptcy filing late Tuesday was filed in an improper venue -- New York -- and should be moved to Iowa. First Bank Business Capital of St. Louis is owed about $33 million by the processor of kosher meats, which has been in deep legal trouble for using illegal immigrant workers and failing to comply with wage and hour laws. Agriprocessors' principal place of business is its meat processing plant in Postville. The company filed for emergency bankruptcy protection in U.S. Bankruptcy Court for the Eastern District of New York, where the company's owner Aaron Rubashkin, lives, and the company has a distribution center. First Bank Business Capital says in its motion that just three of the meatpacker's 20 largest unsecured creditors are located in New York, and the three largest secured creditors are not located in New York. The bank also points out that one of the officers of Agriprocessors -- Sholom Rubashkin -- was recently arrested on federal immigration and identity theft charges, and is not allowed to leave the jurisdiction of the U.S. District Court for the Northern District of Iowa without court permission. The court in which a bankruptcy filed is of importance to creditors because if involves additional expense to hire attorneys in that venue or pay their attorneys to travel. Agriprocessors didn't create any goodwill with the U.S. District Court for the Northern District of Iowa this week when it failed to notify the court of its Tuesday New York bankruptcy filing until an hour before a hearing was scheduled to begin Wednesday morning. The hearing was on a motion by First Bank Business Capital for appointment of a receiver to take control of Agriprocessors assets that served as collateral for its loan. The lender says one reason it wants the venue issue de cided quickly is to address its request for a receiver or trustee to oversee the collateral. It also plans to seek relief from the automatic halt imposed on creditor collection efforts in bankruptcy, known as the automatic stay. In a related order. Chief Judge Linda Reade said the failure to notify the court created undue inconvenience and unnecessary costs for First Bank Business Capital, which had already sent attorneys from St Louis to Cedar Rapids. She said it also wasted the court's time preparing for the hearing. Agriprocessors is seeking bankruptcy protection under Chapter 11 of the bankruptcy code, which provides protection against collections actions from most creditors while the business attempts to find a way to pay off some or all of its debts. -- Contact the writer: (319) 398-8317 or [email protected] To see more of The Gazette, or to subscribe to the newspaper, go to http://www.gazetteonline.com. Copyright (c) 2008, The Gazette, Cedar Rapids, Iowa Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |