Frozen peas head to the bagging machines at NORPAC Foods in Salem.

The bankrupt NORPAC cooperative has struck a deal to sell its Oregon processing facilities for $49 million to Lineage Logistics, a Michigan-based cold storage firm.

While the processing plants in Brooks, Salem and Stayton are included in the asset purchase agreement between NORPAC and Lineage Logistics, it’s unclear whether the latter two facilities will continue to be used for food processing.

Agribusiness entrepreneur Frank Tiegs said he’s planning to lease and operate the Salem facility temporarily, but plans to eventually buy the Brooks plant from Lineage and consolidate processing operations there.

“Our plan is to only operate Brooks,” said Tiegs, who owns 15 processing plants and farms more than 100,000 acres in the Northwest.

Tiegs said he’s also planning to buy the Stayton facility to “gut the plant out” by re-using or selling the equipment within it, and may potentially tear down the structure. Lineage Logistics would retain the corporate offices in Stayton, as well as the cold storage facility in Brooks, he said.

As for Lineage Logistics’ long-term plan for the Salem facility, Tiegs said he’s unsure what the company wants to do with it. Several representatives of Lineage Logistics did not reply to requests for comment as of press time.

At this point, the asset purchase agreement is only tentative, as it must still be approved by a bankruptcy judge and the Oregon facilities may still be subject to competing bids.

When NORPAC declared bankruptcy in August, Tiegs had intended to buy all of its facilities in Oregon as well as its plant in Quincy, Wash., for $155 million, but later backed out of the deal.

He recently ended up agreeing to buy the Quincy plant for up to $107 million after prevailing in a bidding war against the J.R. Simplot Co., a major agribusiness company.

The series of transactions with Lineage made sense to Tiegs because he didn’t want to own all of NORPAC’s assets, he said. “They made it so the numbers worked for me.”

The continued operation of NORPAC’s Oregon facilities for food processing is important for farmers in the Willamette Valley, who have long sold vegetable crops to the cooperative.

Also at stake are the fate of 1,400 people who worked at the Oregon facilities and were issued lay-off notices during NORPAC’s bankruptcy.

I've been working at Capital Press since 2006 and I primarily cover legislative, regulatory and legal issues.

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