APICDA suing Trident over False Pass joint venture
Seattle, Washington, U.S.A.-based Trident Seafoods is being sued by the Aleutian Pribilof Island Community Development Association (APICDA) for allegedly refusing to follow through on an agreement to buy a 25 percent stake in a joint venture to procure a seafood processing facility that processes salmon and whitefish in False Pass, Alaska.
In April 2018, Trident purchased 75 percent of APICDA’s seafood processing facility (which includes a fuel service operation), based in False Pass, Alaska, agreeing to a multimillion-dollar expansion, 25 percent of which would be financed by an APICDA subsidiary, APICDA Joint Ventures, which owns one-quarter stake in the facility.
The lawsuit alleges that while the initial agreement was for the costs to amount to USD 6 million (EUR 5 million) Trident instead spent USD 14 million (EUR 11.8 million) on improvements over the course of the project.
Due to the increased cost of the renovation, and because APICDA Joint Ventures claims it was not at any point made aware of Trident’s overspending, the group decided to exercise a clause allowing it to sell its stake in the facility to Trident, which it said had been inserted into the initial 2018 agreement.
Although an independent firm estimated the cost of the facility at USD 39 million (EUR 32.8 million), and APICDA estimated its portion to be worth USD 5.7 million (EUR 4.8 million) after liabilities, Trident disputes that valuation, citing current market conditions. Trident has not used the plant this season due to the COVID-19 pandemic.
APICDA informed Trident it would be exercising its right to sell on 19 June, 2019, which means that the sale should have been completed by 19 September, 2019.
While the seafood company acknowledges that APICDA invoked the clause requiring it to buy the remaining 25 percent stake, Trident said it did not appreciate its business partner pursuing a legal route rather than continuing to engage in negotiations.
Photo courtesy of Trident Seafoods