LMA recovers $1.43M from Agriprocessors
January 20, 2009
by Bryan Salvage
LMA member markets get payment from Agriprocessors
KANSAS CITY, MO. – Seven Livestock Marketing Association member markets have recovered approximately $1.43 million from Agriprocessors Inc., Postville, Iowa, as a result of action authorized by LMA’s Executive Committee, which includes shouldering a major portion of the legal fees. The money is for livestock the markets sold to the firm, but weren’t paid for, before it filed a Chapter 11 federal bankruptcy petition last November.
On Jan. 15, the U.S. Bankruptcy Court for the Northern District of Iowa ordered the markets and other unpaid sellers to be paid. Ernest H. VanHooser, the attorney who represented the LMA member markets, said it appeared that all the unpaid sellers, who filed claims validated by the Grain Inspection, Packers and Stockyards Administration will receive payment in full.
Validated claims from 25 unpaid livestock sellers total slightly more than $2 million, according to court papers. Payouts could begin the week of Jan. 19. Available sources of payment of these claims include a trust, which is made up of proceeds from the firm’s sale of livestock and meat, and a cash bond.
The bond has a value of $1.245 million, while the trust is valued at about $7 million, according to court documents.
Claims by poultry suppliers are being handled separately.
LMA took several actions that benefited not only the markets, but the other unpaid sellers, said Mark Mackey, LMA chief executive officer. "We joined with a number of other creditors in arguing successfully that this matter should be moved from New York, where the Chapter 11 petition was filed, back to Iowa," he added.
LMA got involved in the case quickly enough to keep the livestock inventory intact, Mr. Mackey noted. "We understood the legal process needed to keep that livestock from going out the back door," he added. "That inventory is a portion of the firm’s assets, which are being used to pay back the unpaid sellers."
LMA’s involvement, he said, also helped keep GIPSA accountable, and on top of the issue.
Mr. Mackey praised the "diligent work of LMA region executive officer Jeff Hazaleus. He kept the members who were involved informed about the progress of the case, and the process they needed to follow to recoup their money."
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