Bankrupt Great Northern Products plans to liquidate assets

Great Northern Products, which filed for Chapter 11 bankruptcy in March 2024, plans to liquidate all of its assets.

The Cranston, Rhode Island, U.S.A.-based seafood dealer filed a proposed reorganization plan on 28 May and then filed an amended plan 6 June. The company lists just under USD 3.2 million (EUR 3 million) in assets and USD 2.5 million (EUR 2.3 million) in debt, including USD 250,000 (EUR 231,000) owed to Berkshire Bank and USD 481,000 (EUR 445,000) owed to the U.S. Small Business Administration.

Both those claims are secured, meaning they will be prioritized when receiving any incoming funds to Great Northern Products. The remaining creditors have been deemed unsecured and “are expected to receive approximately 2 percent of their allowed claims,” according to the filing in U.S. Bankruptcy Court for the District of Rhode Island.

Berkshire Bank was previously owed USD 788,934 (EUR 726,621), but Great Northern has apparently made progress paying down its outstanding debt.

The plan calls for its unsecured creditors to receive their pro rata share of funds owed after all allowed, secured, and administrative claims have been paid in full. Unsecured claims would be paid over a 60-month period.

Founded in 1988 by George Nolan, who remains the company’s sole proprietor, Great Northern Products sells a variety of seafood products including scallops, crab, shrimp, lobster, salmon, and groundfish to wholesalers, restaurant groups, retailers, and others.

As of 24 May, its inventory totaled 174,421 pounds, with a cost value of just over USD 1 million (EUR 925,000). It is holding 67,473 pounds of rock crab for which the company paid USD 10.48 (EUR 9.70) per pound, which it estimates it can sell at USD 4.90 (EUR 4.54) per pound, or around USD 330,000 (EUR 305,000). Additionally, it has 34,158 pounds of whelk valued at USD 109,958 (EUR 101,760).

Nolan estimates it will take him around one month to complete the sale of its inventory and ship it to customers. Salaries at the company have been reduced by 50 percent, and it is likely the company will be closed by July, according to the filing.

Nolan opposes moving the company from a Chapter 11 filing to a Chapter 7 bankruptcy, which would place it into immediate liquidation overseen by a third party.

“The plan constitutes the debtor's best efforts to repay creditors. Unsecured creditors will very likely receive nothing if the debtor is put into an immediate and forced liquidation,” the company said. “It is assumed, reasonably so, the debtor submits, that a Chapter 7 trustee will have no choice but to attempt to proceed with a bulk sale or distressed auction of the remaining inventory. None of the trustees who would be appointed have any considerable or in-depth seafood experience. They will not know the products or the overall mix of inventory nor will they know the customers, or their desires or preferences, nor will they have any assurances of sales personnel being available to assist in such a distressed sales process.”

Great Northern said it has explored a bulk sale of its inventory but “there have been no interested parties to take on such sales because of the industry conditions.”

“Despite this, the debtor still estimates that the trustee could realize USD 0.25 to USD 0.50 [EUR 0.23 to EUR 0.46] per pound through such a distressed sales process,” it said.