The Agriprocessors Bankruptcy – Can The Bankruptcy Trustee Recover Payments Made To Suppliers Within 90 Days of the Bankruptcy Filing?
Agriprocessors, a slaughterhouse and meatpacking plant in Postville, Iowa, that utilizes glatt kosher processing of cattle, chicken, turkey, duck, lamb and veal, filed for Chapter 11 bankruptcy on November 4, 2008. The company, the nation’s largest kosher meatpacking plant, filed bankruptcy upon facing a drop in demand for their products and higher costs associated with a May 2008 immigration raid. Agriprocessors is being operated at the present time by Chapter 11 bankruptcy trustee, Joseph E. Sarachek of Triax Capital Advisors.
Now the bankruptcy court has informed livestock sellers that sold livestock to Agriprocessors in the 90-day timeframe preceding the company’s bankruptcy filing that they have 10 days from a letter dated November 23, 2009, to repay 80 percent of what Agriprocessors paid them for their livestock. Apparently, at the present time it appears that the bankruptcy court has approved an extension to the due date for repayment to December 15, 2009. In any event, it remains possible that a seller’s failure to respond to the letter could result in the bankruptcy court authorizing 100 percent repayment. The bankruptcy trustee has identified approximately $50,000,000 of payments made by Agriprocessors to its suppliers within 90 days of Agriprocessors’ November 4, 2008 bankruptcy filing.
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