By DAVID WINTERS, Watertown Daily Times
CANTON — A state Supreme Court judge has ruled the city of Ogdensburg has become the 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. The kosher plant on Main Street remains open.
“We’re trying to secure the operations of the plant in its continuance,” City Manager Arthur J. Sciorra said.
State Supreme Court Judge David R. Demarest ruled Monday in the city’s favor. The equipment used as collateral includes several silos, processing tanks and boilers, the cheese line processor and water treatment and cooling systems.
The loan agreement called for the city “to take possession of the collateral at its discretion,” should St. Lawrence Food default on its loans. Company officials in August refused to give them the equipment.
The city acquired the Main Street building and property in late July for delinquent property taxes. St. Lawrence Food didn’t pay the 2006 tax bill on the property, totaling $89,000, city officials said.
Last week, a federal judge overseeing the Ahava of California bankruptcy dismissed the case because the company’s secured creditors argued the auction wouldn’t yield enough of a return to satisfy outstanding debts.
Ahava of California LLC, Venice, Calif., 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 having more than 200 creditors.
St. Lawrence Food, owned by Moise A. Banayan, leased the kosher food operations in Ogdensburg and Lowville to North Country Manufacturing in 2007. The lease for Ogdensburg was signed Oct. 30, 2007, while Lowville was signed Aug. 29, 2007.
Moise Banayan had no ownership interest in Ahava of California since his brother, Fariborz Banayan, bought out his 50 percent share of the company in August 2005. Moise filed for federal bankruptcy protection in April.
The Ogdensburg plant employs about 60 full-time workers, company officials said last year.
