IOWA CITY, Iowa -- Iowa's labor agency has agreed to slash proposed fines by $9 million against the former owners of a kosher slaughterhouse that was the site of a massive immigration raid with the hope that it can recoup a fraction of the penalties.
Iowa Workforce Development reached a settlement Friday with the Agriprocessors, Inc. bankruptcy trustee to cut fines of almost $10 million to $1 million. The Postville meatpacker was sold last week to a newly formed company, SHF Industries.
The state levied $9.98 million in fines in October based on its contention that Agriprocessors made illegal deductions from employee paychecks - five months after a 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.
Agency spokeswoman Kerry Koonce said Monday 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,"" Koonce said. ""By putting the settlement out there, we have a chance to collect something.""
The nearly $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, Koonce said.
Dan Childers, an attorney for bankruptcy trustee Joe Sarachek, said the fines will be paid out of any money Sarachek can recover from payments the company made before it [declare]d bankruptcy. Sarachek is able to 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, Childers said.
Childers said the settlement does not mean Agriprocessors is admitting guilt to the civil charges. He said 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.
""That was the motivating factor,"" Childers said.
The motion filed Friday in U.S. Bankruptcy Court in Cedar Rapids comes less than a week after the plant was sold. If the fine agreement is approved by Judge Paul Kilburg, the claim would get priority status, leaving some chance Agriprocessors could pay it.
Priority status in the bankruptcy means that the claim would be paid before payments to unsecured creditors, a collection of individuals, businesses and government entities to which Agriprocessors owes money. The state was essentially an unsecured creditor before the fines. With the settlement, it was able to vault over the unsecured creditors and has some assurance that it will get some money.
""Right now, we're just focused on doing what's best for the state of Iowa,"" Koonce said.
Childers said the buyer, SHF Industries, isn't involved in the case and won't have to pay any of the settlement.
http://www.newsobserver.com/1566/story/1623391.html
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