Iowa to cut fines by $9M against Agriprocessors
July 29, 2009
by Bryan Salvage
IOWA CITY, IOWA — Iowa's labor agency has agreed to cut proposed fines by $9 million against the former owners of the Agriprocessors Inc. plant in Postville, Iowa — which was the site of a massive immigration raid last year — in hopes it can recoup some of the penalties, according to The Associated Press.
Last Friday, Iowa Workforce Development reached a settlement with the Agriprocessors Inc. bankruptcy trustee to reduce fines of almost $10 million to $1 million. Agriprocessors was sold last week to SHF Industries.
In October, the state of Iowa levied $9.98 million in fines based on its contention that Agriprocessors made illegal deductions from employee paychecks — five months after federal agents detained 389 workers in an immigration raid at the plant. The state also fined the plant $4,900 for allegedly failing to pay 42 employees their last paychecks.
On July 27, agency spokeswoman Kerry Koonce said the state didn't think the company would pay the $10 million from the proposed civil fines because of its bankruptcy. "It was never going to get collected by the state," Ms. Koonce said in the AP report. "By putting the settlement out there, we have a chance to collect something."
The almost $10 million proposed fine against Agriprocessors was the highest in state history. The reduced $1 million proposed settlement would be one among "several" million-dollar fines levied by the agency, Ms. Koonce said.
Dan Childers, an attorney for bankruptcy trustee Joe Sarachek, said the fines would be paid out of any money Mr. Sarachek can recover from payments the company made before it declared bankruptcy. Mr. Sarachek can recover money from any property transfers made within 90 days before the Nov. 4 bankruptcy filing, as well as certain transfers the company made two years before the bankruptcy filing, Mr. Childers said.
Mr. Childers added, however, the settlement does not mean Agriprocessors is admitting guilt to the civil charges. Part of the purpose of the settlement is to save both the company and the state the cost of investigating and litigating the fines, as well as finding a sum that was acceptable to both sides, he said.
The motion filed Friday in U.S. Bankruptcy Court in Cedar Rapids happened less than a week after the plant was sold. If the final agreement is approved by Judge Paul Kilburg the claim would get priority status, leaving some chance Agriprocessors could pay it.