By Dave DeWitte
The Gazette
July 24, 2009
Iowa Workforce Development has agreed to slash its nearly $10 million penalty claim against Agriprocessors for illegal wage deductions and unpaid wages.
The fine announced on Oct. 29, 2008, was the largest that Iowa Workforce Development had ever levied. It covered findings that Agriprocessors unlawfully deducted $192,597 from workers paychecks for frocks they wore on the job, and failed to pay the final paychecks of 42 workers arrested in an immigration raid.
In a proposed settlement with Agriprocessors bankruptcy trustee, state Labor Commissioner Dave Neil agrees to reduce to a $9.98 million claim for illegal paycheck deductions and a $4,900 claim for the unpaid wages to $1 million.
The settlement agreement was submitted Friday to Chief U.S. Bankruptcy Judge Paul Kilburg for his approval.
Under the settlement, the $1 million would become a priority claim in Agriprocessors’ bankruptcy case, one of the claims that will be paid first if funds become available. There appears to be no guarantee, however, that even $1 million can be paid.
This week’s bankruptcy court approval for the sale of most Agriprocessors assets $8.5 million to SHF Industries is expected to leave nothing for unsecured creditors, and possibly some partial payments to secured creditors.
Although most of the valuable assets of the company have been sold, an attorney for trustee Joe Saracheck told the bankruptcy court recently that they still have hopes of recovering “preference” payments.
Preference payments are payments made in the three months immediately preceding a bankruptcy that could be deemed preferential to certain creditors. In the case of individuals or firms closely connected to the company, payments going back even further may be subject to forfeiture for the benefit of other creditors.
http://www.gazetteonline.com/apps/pbcs.dll/article?AID=/20090724/BUSINESS/707249952/1007
