Bank says meatpacking plant defaulted on $35M loan

A St. Louis-based bank is seeking to seize and auction all of Agriprocessors' assets, claiming the slaughterhouse defaulted on a $35 million loan.

First Bank said in a lawsuit filed Thursday in U.S. District Court in Cedar Rapids that Agriprocessors overstated how much money it has available and that the company is either unable or unwilling to meet its loan payments.

The suit names Agriprocessors owner Aaron Rubashkin, his son and former CEO Sholom Rubashkin and slaughterhouses in Postville, Iowa, and Gordon, Neb. In addition to livestock and plant equipment, the suit includes the Rubashkins' personal property as collateral.

"(Agriprocessors) have repeatedly made misrepresentations to First Bank by providing inaccurate and misleading Notices of Borrowing and other documents that misstated the value of the Collateral," the lawsuit states.

The bank and the slaughterhouse held a phone hearing Friday in U.S. District Court in Cedar Rapids and agreed to reconvene next week. If the bank prevails, the suit states it will hold foreclosure sales of the company's assets.

The lawsuit follows a May immigration raid at Agriprocessors's Postville plant that resulted in 389 arrests. The Rubashkins and others at the plant have been charged with violating state child labor laws, and Sholom Rubashkin was charged with helping illegal immigrants get fake documents Thursday.

Agriprocessors did not immediately return calls seeking comment Friday.