990740 Thorn Apple Valley Gets Court Approval for Sale

Detroit - Troubled meat processor Thorn Apple Valley has been officially been sold as part of its bankruptcy plan.

IBP Inc., which has moved its headquarters to Dakota Dunes, SD, from Dakota City, Neb., is buying the company for $115 million.

The sale was approved by Judge Ray Reynolds Graves in U.S. Bankruptcy Court in Detroit. He ruled that all proceeds will go to secured creditors.

Unsecured creditors, such as the City of Detroit, which is owed about $6.5 million in back taxes and utilities, are unlikely to be paid, the Detroit Free Press reported. Thorn Apple Valley had owed all its creditors about $182 million.

It was the meatpacker's second offer for the Southfield firm. In June, Thorn Apple Valley announced it planned to sell to IBP for $112 million. But Excel Corp. of Wichita, Kan. then offered $114 million.

Thorn Apple Valley President Joel Dorfman, who declined to comment, said previously that the company would continue to operate under the Thorn Apple Valley logo, and employees would keep their jobs. The company has about 3100 employees.

The company was founded by Dorfman's father, Henry Dorfman, who started with one plant in 1952 in Detroit's Eastern Market. It made hot dogs, luncheon meats and smoked sausages, and maintained a slaughterhouse in the market until last year.

Thorn Apple Valley had endured years of losses. But after the costly January recall of 30 million pounds of meat, and a quarterly loss of $19.2 million, it sought protection from creditors under Chapter 11 bankruptcy in March.

The recall of meat potentially contaminated with poisonous listeria bacteria triggered the fall. Lost production and sales cost about $5.1 million. No illnesses were linked to the meat, which was processed in Arkansas.

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