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The wheels are turning with the sale of NORPAC food processing facilties, but some caveats remain

PMG PHOTO: JUSTIN MUCH - The Brooks NORPAC food processing facility is expected to be back in operation under new ownership once all the business transactions shake out.Events that emerged from a bankruptcy courtroom last week shed some light on how the sale of the NORPAC facilities is shaping up, but there is still some uncertainty about how the ordeal will shake out.

More clarity is expected to emerge this week if a decision about a union contract is rendered following a Jan. 24 hearing.

Last week U.S. Bankruptcy Judge Peter McKittrick approved the sale of the Brooks, Salem and Stayton food-processing plants to Michigan-based Lineage Logistics for $49 million. Meanwhile, an Oregon Potato Company subsidiary, Vegco, is reportedly prepared to lease the Brooks plant for operations.

Reports indicate the Vegco is not interested in operating the Salem or Stayton facilities.

One legal caveat within the process involves attorneys for unions representing NORPAC's former employees. Collective bargaining agreements formulated earlier with NORPAC must be resolved before the approved sale is finalized.

The Capital Press reported that the International Brotherhood of Teamsters union opposed the sale as it is negotiating with agribusiness entrepreneur and Oregon Potato Company owner Frank Tiegs on the status of the pension plan for full-time NORPAC employees.

According to the Capital Press Jan 14 article "Sale of NORPAC's Oregon facilities hinges on resolving union objection," the union contends that "Tiegs qualifies as a successor to NORPAC under a collective bargaining agreement, and the cooperative can be held liable if he doesn't assume the provisions of that contract."

The court decision stated that the sale shall not close unless one of the following conditions has been satisfied: the Teamsters Union withdraws its objection to the sale; the court approves the debtors rejection of the collective bargaining agreement; the court determines that the bargaining agreement is inapplicable to the sale.

McKittrick, who approved the sale last week, is expected to render a decision on the collective barganing dispute following the Jan. 24 hearing.

Meanwhile, area farmers who transacted with NORPAC are left in limbo, weighing the food-processing ambiguities for the next growing season, whlie many are still owed money from previous ones.

"Farmers did not get paid for last year's crop, and they are unsure of the future. At least they can hope that crops will be needed for next season," said Dave Henze, president of the French Prairie area's Coleman Agriculture.

"There is still a lot of uncertainty," Marion County Farm Bureau President Dylan Well said. "No one is counting on anything until they actually see action."


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