LINCOLN, Neb. (AP) — A Nebraska meatpacking plant will reopen under new management nearly five years after it was forced to close because of legal and financial problems tied to its sister facility in eastern Iowa.
The Gordon City Council approved the plant's sale late last week to Open Range Beef, a company registered in Bellevue. The company will reopen the plant, which previously operated under the name Local Pride Kosher, Gordon city manager Fred Hlava said Thursday.
Shortly after an immigration raid at the Agriprocessors slaughterhouse in Postville, Iowa, the rural northwest Nebraska plant closed in September 2008. Agriprocessors, which owned both plants, declared bankruptcy, and Sholom Rubashkin, a top executive at the Iowa plant, is now serving a 27-year federal prison sentence for financial fraud.
The Nebraska plant was acquired Gordon and the company's former lender, St. Louis-based First Bank Business Capitol, during a trustee sale in 2009.
Hlava estimated that the plant will be online within four months, after the new owners complete renovations and undergo inspections from the U.S. Department of Agriculture. It will employ between 70 and 80 people once it reopens, Hlava said.
"Without a doubt, it's a boon for our employment base," Hlava said of the 1,600-resident town located less than 20 miles to the south of South Dakota's Pine Ridge Indian Reservation. Before it closed, the plant served as a major employer for residents of Pine Ridge, which is known for its high unemployment.
The Postville, Iowa, plant gained attention in May 2008 after a large-scale immigration raid in which authorities detained 389 people. The plant filed for bankruptcy a few months later and was later sold.
Prosecutors alleged Rubashkin intentionally deceived the company's lender and directed employees to create fake invoices in an effort to show First Bank Business Capitol that the plant had more money flowing in than it did. He was sentenced to prison on fraud charges, though an Iowa jury acquitted Rubashkin of state child labor charges.
A company spokesman for Open Range Beef did not return several phone messages left on Thursday. Company spokesman Roy Wiggs said in a news release: "Packing houses are all made from brick and mortar ... it's people that make the difference. Our investment group is very solid and we have an established customer base that is an intricate part of our business model."
Hlava said potential investors had expressed interest in the plant, but had trouble with financing the plant upgrades because of the recession.