Credit Buy Seen As Move Toward Agriprocessors Sale

An unidentified company has made a move toward buying a struggling Postville meatpacking plant.

The plant, Agriprocessors, was the region’s dominant employer until last May, when it was the site of a huge immigration raid. It went into bankruptcy last fall. Its future has been in doubt since March, when an attempt to auction it off failed to attract an offer that would satisfy the company’s creditors.

Bankruptcy Trustee Joseph Sarachek declined today to say who the new bidder was.

He said the company bought out a $10 million line of credit from First Bank Business Capital, which was Agriprocessors’ biggest creditor. Sarachek said First Bank still has an interest in the bankruptcy case, because of money it lent to the meatpacker before the bankruptcy case was filed.

Sarachek said he continues talking to other potential buyers. He declined to say how much the mystery company paid to buy out First Bank’s credit line. He called the move “a first step toward going ahead with a sale.”

He said the process could move forward quickly, but other creditors would have to approve any deal.

Federal prosecutors probably would have to approve any deal as well. The prosecutors are pressing charges against Agriprocessors’ former leaders, and they’ve threatened to seize many of the company’s assets as part of the criminal case. They’ve said they would only approve a sale of the company if the buyer had no connection to the previous owners.

A spokesman for the U.S. attorney’s office declined comment today on whether prosecutors have been consulted about the potential buyer who bought out First Bank’s loan.

Several potential buyers have appeared in the past, but no deal has been reached.