NORPAC’s assets may be split up

An attorney for NORPAC Foods believes the bankrupt processor’s assets may be divided among several buyers if farm entrepreneur Frank Tiegs refuses to buy most of them.

Tiegs had planned to buy the farm cooperative’s Oregon facilities in Brooks, Salem and Stayton, as well as its plant in Quincy, Washington, for $155 million as part of the company’s debt restructuring in Chapter 11 bankruptcy.

However, shortly before competing bids were due for the assets Oct. 18, Tiegs said he was terminating the “asset purchase agreement,” citing concerns about environmental and regulatory problems at NORPAC.

During a bankruptcy hearing Monday in Portland, NORPAC’s attorney, Albert Kennedy, said the company’s been approached by other “potential purchasers” who’d each be willing to buy a portion of the assets that Tiegs had intended to buy.

At this point, though, NORPAC Foods and a committee representing its creditors don’t believe the termination of the “asset purchase agreement” is legally effective and want U.S. Bankruptcy Judge Peter McKittrick to approve the sale, Kennedy said.

If the dispute ends up in litigation, NORPAC doesn’t want Tiegs to present the defense that there was no contract, Kennedy said.