American shrimp-farming company American Mariculture, along with American Penaeid and Sun Shrimp Gourmet, have filed for Chapter 11 bankruptcy protection citing financial difficulties following multiple hurricanes and business downturns.
Co-founded by Robin Pearl in 2013, the three companies’ original plan was to raise shrimp for consumption, but after operational issues early on, the company switched to producing broodstock for other shrimp farmers.
According to the company’s bankruptcy case management filing, at one point, sales reached USD 25 million (EUR 24.3 million) as it became the largest producer of broodstock in the world, with significant increases in international sales – the majority of which were to Chinese companies.
The company took a significant hit when the Covid-19 pandemic shut down the Chinese market, drastically lowering its sales. The company said sales began to increase post-Covid, and the owners tried to sell the company but failed – which they attributed to three main reasons.
“First, Hurricane Ian caused significant damage to the debtors’ operations. Second, there was a downturn in the global shrimp market. Third, a judgement of approximately USD 5 million [EUR 4.8 million] was entered in a trademark infringement lawsuit against API, and another USD 5 million judgment was entered against the former officer,” the filing states.
The “former officer” refers to President and CEO Robin Pearl, who announced in a LinkedIn post in late December that he resigned as CEO of American Mariculture, American Penaeid, and Sun Shrimp Gourmet “over one month ago.”
Pearl said he resigned because an “influential family group” of shareholders in the company demanded he make changes “to which I simply could not agree.”
“While I am very disappointed with the way my tenure at these companies that I loved so much ended, I sincerely hoped that the new corporate directors and executives would prove me wrong and make my companies enormously successful,” Pearl said. “I decided to keep news of my departure private in order to give the company and the new executive team the best chance to continue without me. Sufficient time has now passed, and given some of the current activities and/or decisions, I want to make it clear I have had no involvement with the company since mid-November.”
In the bankruptcy case management summary filed by American Mariculture, the company said since Pearl’s resignation, Ross and Trevor Horsley were serving as officers of the company, with Ross serving as president and Trevor serving as secretary and treasurer. The filing claims that after the new leadership reviewed the company’s records, “a number of financial irregularities were discovered,” though the filing does not elaborate.
Despite the alleged financial irregularities mentioned in the bankruptcy case summary, in a more recent post in his LinkedIn, Pearl announced he and the shareholders met in January, and “the path forward included me coming back.”
“We also agreed to my plan to restructure the company to make that happen,” Pearl wrote. “So today, I return to lead the companies I co-founded and care for so much. I really view it as catching a second wind to continue forward and accomplish the high goals I have always set for the companies, my teams, and myself.”
Pearl will resume control of the company as it grapples with unpaid debts.
According to the case management summary, American Mariculture’s priority claims include USD 155,000 (EUR 150,000) in unpaid payroll taxes, USD 175,000 (EUR 170,000) for accrued health insurance obligations, and USD 325,000 (EUR 315,500) in accrued payroll. On top of that, it has multiple secured claims against it, including USD 2.65 million (EUR 2.57 million) owed to NOAA for a loan, USD 3 million (EUR 2.9 million) for a loan granted by Cargill Financial Services, and USD 2 million (EUR 1.9 million) owed to the Small Business Administration for an economic disaster loan in 2021.
On top of the priority and secured claims, the company said it has USD 2.6 million (EUR 2.5 million) in unsecured creditors and USD 2.5 million (EUR 2.4 million) in loans from investors. The largest unsecured creditor, according to court filings, is Pearl – who is owed USD 1.94 million (EUR 1.88 million).
Peal said that now that the company is back under his leadership, he’s aiming to see it “come out much stronger” after the agreed-upon restructure.
“I am pleased to inform you that our broodstock look fantastic and are ready to travel the world and help farmers everywhere,” he said. “To all of you who expressed your support, a sincere thank you, and I ask you to now please help me to restore AMI and API quickly.”
