Ogdensburg seeks buyer for kosher-cheese plant

OGDENSBURG — The city is scouting for potential buyers to acquire the kosher-cheese operations here.

Ahava of California LLC, Venice, Calif., reportedly owes the city $90,000 in back rent and $618,138 in delinquent utility payments. The city will evict the business March 10, should the delinquent bills not be paid. The plant continued making cheese last week.

City officials hope a suitor can be found before the eviction and ensure a seamless transition in owners. A plant manager declined comment last week about its future, including the status of its workers or shutdown date.

"I'm talking with several individuals that have expressed an interest in the plant," said City Manager Arthur J. Sciorra, declining to reveal the prospects or if any purchase offers have been made. "The new owners won't be responsible for the prior debt. Whenever we take over a taxing property, we try to recapture most of the debt against it. We're trying to recuperate the losses the municipality has incurred by the bankruptcy and foreclosure."

The Main Street plant employs about 30 full-time workers, city officials said. Ahava filed for bankruptcy protection last year, but a federal judge recently dismissed their petition.

Ahava hasn't paid its $15,000-a-month rent since August. Ahava's lawyers told the city manager recently they won't contest the lease termination.

"The city has no intention of directly running the cheese plant," Mr. Sciorra said. "We're not going to bankroll it. We're not getting into the cheese-making business."

The city acquired the Main Street building and property in late July over delinquent property taxes. Previous owner St. Lawrence Food Corp. didn't pay the 2006 tax bill on the property, totaling $89,000.

Last month, the city also became owner of cheese-making equipment after St. Lawrence Food Corp. defaulted on loans. The city filed suit in September against St. Lawrence Food when the company defaulted on loans issued by the city totaling about $500,000. The company used the cheese-making equipment as collateral on the loans.

"We're in a race against the clock to resolve this," Mr. Sciorra said. "There are some good prospects out there."

St. Lawrence Food, owned by Moise A. Banayan, leased the kosher-food operations in Ogdensburg and Lowville to Ahava in 2007. The lease for Ogdensburg was signed Oct. 30, 2007, while Lowville's was signed Aug. 29, 2007.

Moise Banayan has had no ownership interest in Ahava since his brother, Fariborz Banayan, bought out Moise Banayan's 50 percent share in Ahava in August 2005. Moise Banayan filed for federal bankruptcy protection in April.

Ahava, doing business as North Country Manufacturing and Ahava National Food Distributor, filed paperwork in July with U.S. Bankruptcy Court Central District of California. In the bankruptcy filing, the company listed its assets and liabilities each at $1 million to $10 million and said it had more than 200 creditors.

Last month, a federal judge overseeing the Ahava bankruptcy dismissed the action because the company's secured creditors argued that an auction to sell the company's assets wouldn't yield enough of a return to satisfy outstanding debts.