Agriprocessors trustee files suit to avoid $1.5 million of transfers

By Caroline Salls

Pittsburgh, June 29 - Agriprocessors, Inc. Chapter 7 Trustee Joseph E. Sarachek filed a lawsuit Wednesday against creditor Chabad of Princeton in an attempt to avoid $1.5 million in allegedly fraudulent conveyances and preferential transfers, according to a filing with the U.S. Bankruptcy Court for the Northern District of Iowa.

Saracheck said Chabad of Princeton, also known as Chabad Lubavitch of Greater Mercer County, received at least 159 payments from Agriprocessors in the two years before it filed for bankruptcy.

The trustee said he is not aware of any value provided to Agriprocessors in exchange for the payments, meaning the transfers were made "for less than a reasonably equivalent value."

In addition, Sarachek said Agriprocessors was insolvent when it made the payments, which were allegedly made to benefit a company insider who had a close relationship with Chabad of Princeton.

Agriprocessors, a Potsville, Iowa-based kosher meat and poultry packer and food processor, filed for bankruptcy on Nov. 4, 2008 in the U.S. Bankruptcy Court for the Eastern District of New York. Its case was later transferred to Northern Iowa. Its Chapter 7 case number is 08-02751.

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