Agriprocessors files for Chapter 11 protection

by Keith Nunes
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POSTVILLE, IOWA — For Agriprocessors, Inc., the nation’s largest slaughterer and processor of kosher beef, the situation has gone from bad to worse since Immigration and Customs Enforcement (I.C.E.) agents raided the company’s facility on May 12. The company filed for Chapter 11 bankruptcy protection on Nov. 4 in an effort to prevent its largest lender, First Bank of St. Louis, from foreclosing on the company’s facility in Postville.

The company’s facility has been closed since I.C.E. raided the plant and arrested 389. Since the raid, accusations have swirled around the company that it had engaged in unfair employment practices and that some of its managers had attempted to harbor undocumented workers through fraudulent practices. As a result, fines have been assessed and facility managers arrested and charged.

Agriprocessors was assessed $9,988,200 in proposed civil penalties by Iowa’s Labor Commissioner on Oct. 29 for violations of the state’s wage laws from Jan. 1, 2006, to June 30, 2008. A penalty of $100 was assessed for every incidence when an employee was charged for the frocks they used while working for the company. The charge occurred on 93,643 occasions and resulted in a total penalty of $9,643,600.

Additional fines included $339,700 for illegally deducting sales tax/miscellaneous costs 3,397 times. More than 1,000 employees were affected by the deductions. The company also failed to pay 42 employees their last paychecks on May 16 and May 23 following a raid by I.C.E. A penalty of $4,900 was assessed for the violation.

Agriprocessors has 30 days to contest the proposed penalties. The state agency also noted that an additional investigation is ongoing and may lead to more civil penalties.

In addition, Sholom Rubashkin, the former chief executive officer of Agriprocessors and son of company owner Abraham Rubashkin, was arrested on Oct. 30 and charged by federal authorities with conspiracy to harbor undocumented immigrants for financial gain as well as document fraud and identity theft. Mr. Rubashkin’s arrest occurred one day after Laura Louise Althouse, 38, a former employee in the Agriprocessors’ human resources department, pleaded guilty in federal court to one count of conspiracy to harbor illegal aliens and one count of aggravated identity theft. Two other Agriprocessors supervisors face federal immigration charges.

According to documents filed in federal court, Ms. Althouse conspired with others to harbor illegal aliens at the Agriprocessors plant in Postville. The documents stated that she harbored the aliens for commercial advantage and private financial gain. The information also stated Ms. Althouse possessed and used, without lawful authority, a resident alien number that was assigned to another person in committing the harboring offense. She faces a minimum of two years and a maximum of 12 years in prison as well as a $500,000 fine.

The bankruptcy filing said Agriprocessors owes as much as $100 million to creditors. Several news reports indicate outside interests may either invest in or acquire the company.

This article can also be found in the digital edition of Food Business News, November 11, 2008, starting on Page 1. Click here to search that archive.

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