A bankruptcy sale of Agriprocessors is expected to go ahead without a lead bidder after an Israeli company’s $40 million offer for the Postville meatpacking company fell through.

Soglowek Nahariya Ltd. emerged last month as the “stalking horse” bidder for the assets of the Postville meatpacking concern, which was placed under bankruptcy protection by its owner, Abraham Aaron Rubashkin, in November 2008.

Under the bidding procedure, Soglowek’s $40 million offer was to be the foundation for further bidding for the assets of the company by other companies in a court-administered auction.

Soglowek couldn’t complete an asset purchase agreement in time to meet a deadline this week because the company hadn’t completed its due diligence, according to Joseph Sarachek, court-appointed trustee for the Agriprocessors bankruptcy.

Sarachek said after a bankruptcy hearing that the problem was the multitude of equipment leases, vendor agreements and purchase agreements that had to be evaluated and potentially renegotiated to determine how much Agriprocessors was worth.

“It is mind-boggling,” Sarachek said.

Sarachek said Soglowek remains “engaged” in the purchase process despite having no firm agreement. He said four or five companies are serious about buying Agriprocessors, including one “very sophisticated” potential buyer that emerged only Tuesday.

If another stalking horse bidder does not emerge, the sale will go ahead as a straight auction, Sarachek said. Companies will submit bids in advance using a standardized form, and be able to raise their bids on the date of the open auction.

The target date for the auction is March 23, Attorney Mark Childers, who represents the trustee, said today in court.

Soglowek makes meat products, meat substitutes, frozen baked goods, and vegetarian products, with annual sales estimated at $175 million. It is reported to be working with an unnamed U.S. partner on the deal.

(Source: Gazette Online)