Rath Packing Co., based in Waterloo, Iowa, stopped its meat-processing operations yesterday in a bid to gain time and funds needed to move the company through reorganization in federal bankruptcy court.
Rath officials said the shutdown is "limited and temporary." No time was given for resumption of production, nor would officials indicate how many workers were idled by the shutdown.
Company officials said that they will use the temporary shutdown to file a new plan of reorganization in U.S. Bankruptcy Court in Iowa. The plan would turn Rath, once a national distributor of processed meats, into a regional meat processor and distributor marketing the Black Hawk label, officials said.
Rath is seeking protection from creditors under Chapter 11 of the Federal Bankruptcy Code as the result of a petition filed by the company on Nov. 1, 1983. Rath was owned by employes at the time of its Chapter 11 filing.
The employes took over Rath in May 1982 in an attempt to keep it in business. But a year later, the company lost $10 million on sales of $340 million. Rath employes last September sold their privately held company to Financial Resources Corp., a New Jersey group venture headed by Leonard Brown of Freehold, N.J.
Rath officials could not be reached for comment yesterday. But the company said in a formal statement that it hopes it can obtain enough refinancing to reopen its Waterloo plant. The company also is trying to settle unsecured debts -- usually debts incurred without collateral -- in a way that will allow it to remain in business.