By Jean Caspers-Simmet
simmet@agrinews.com
POSTVILLE, Iowa — USDA’s Grain Inspection Packers and Stockyards Administration is investigating Agriprocessors, the kosher meatpacker and processor in Postville, according to a document filed with the U.S. Bankruptcy Court.
Agriprocessors filed for Chapter 11 bankruptcy protection Nov. 4 In U.S. Bankruptcy Court for the Eastern District of New York.
A document, filed Nov. 6 on behalf of creditor First Bank Business Capital asking for a change of venue/inter-district transfer to the Northern District of Iowa, lists as one of the reasons for the move that the Des Moines office of GIPSA is involved with Agriprocessors, "asserting trust claims under the Packers and Stockyards Act on behalf of allegedly unpaid sellers of livestock and live poultry" to Agriprocessors.
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"Our policy is not to speak about ongoing investigations and that is an ongoing investigation," said Jay Johnson, regional director of GIPSA’s Des Moines office. "We have people there."
Johnson said that any livestock producer that sells livestock and doesn’t get paid or receives a bad check should contact the Des Moines GIPSA office as soon as possible.
Trust provisions in the Packers and Stockyards Act give cash sellers of livestock and poultry preferential treatment in a bankruptcy ahead of most secured creditors, Johnson said. Poultry growers who don’t own birds, but grow them out for someone else have certain rights as well.
"Whenever there is a financial failure or complaints of people not getting paid, we send investigators to try to determine if there were any unpaid sellers or contractors," Johnson said. "We want to make sure that no one falls through the cracks. We want people to preserve their rights."
The regional GIPSA office is located in the Federal Building, 210 Walnut Street, Des Moines, IA 50309, telephone (515) 323-2579, fax (515) 323-2590.
Two trusts, a packer trust and a poultry trust, are authorized in the Packers and Stockyards Act, according to the GIPSA Web site.
The packer trust protects cash sellers of livestock. It does so by making the cash sellers' rights to specific assets of the packer legally superior to the interests of any secured lenders to whom the packer offered those assets as collateral for loans. Similarly, the poultry trust protects live poultry growers and cash sellers of poultry. It does so by making their rights to specific assets of the live poultry dealer legally superior to the interests of any secured lenders to whom the live poultry dealer offered those assets as collateral for loans.
To preserve their rights, sellers and growers must file timely written notice of their claim against the regulated entity who owes them, the website said. This written notice must be provided to GIPSA and the regulated entity who owes the seller or grower within a specified period. A claim on a bounced check must be made within 15 days. A claim for no payment must be made within 30 days.
