Ailing Rath Seeks Way to Salvage What’s Left

CEDAR RAPIDS, Iowa —  More than 100 Rath Packing Co. workers filled a bankruptcy courtroom Wednesday as lawyers outlined proposals for salvaging what remains of the employee-owned company, once one of the nation’s largest meatpackers.

One option for saving the company was a proposal for workers to invest millions to reopen it as a slaughtering and processing plant. Other possibilities include making the company a regional processor that would do business only in a limited market such as the Midwest or selling it to an outside buyer.

Rath President Lyle Taylor introduced a plan last week that would have the company sell a nearby Columbus Junction plant and become a regional packer, providing about 500 jobs in Waterloo, Iowa.

That sale, initially criticized by a group of unsecured creditors who don’t want anything sold until a formal reorganization plan is presented in court Feb. 1, was tentatively approved by lawyers in the case Wednesday.

Under another plan outlined by lawyers in a Cedar Rapids bankruptcy courtroom Wednesday, employees would raise $2 million to $4 million and secure a large loan to reopen as a processing and slaughtering plant employing 1,400.

Taylor admitted that it would be difficult for employees to raise the money, but added: “I’ve seen these people do a lot of things that no one said they could.”

One of the three plans will be submitted to a bankruptcy judge Feb. 1.