A U.S. bankruptcy court has granted a motion to sell Cozy Harbor Seafood’s assets to Indiana-based Aquashell.
Cozy Harbor filed for Chapter 11 bankruptcy in early July, and announced in late October it was planning to sell the assets of its company to Aquashell for USD 6.5 million (EUR 5.6 million). That deal includes USD 2.01 million (EUR 1.73 million) for Cozy Harbor’s accounts receivable, USD 2.74 million (EUR 2.36 million) in product inventory, and USD 1.75 million (EUR 1.51 million) in Cozy Harbor’s property.
U.S. Bankruptcy Judge Michael Fagone approved the sale, finding that the sales process of Cozy Harbor’s assets met the required marketing and bid process.
“The Debtors have complied with the Bid Procedures and conducted the sale process substantially in accordance therewith,” Fagone’s order states.
The proceeds of the sale will be used by Cozy Harbor to pay off its debts, including two major claims from KeyBank and Camden National Bank. KeyBank is by far the largest creditor, and according to the court order Cozy Harbor will pay the bank USD 5.3 million (EUR ) to settle its accounts, while Camden National Bank’s share is USD 357,400 (EUR ).
The sale will leave unsecured creditors largely without any distribution of funds, but the committee of unsecured creditors did not oppose the asset purchase agreement.
“Although disappointed that the sale process has resulted in an outcome that leaves general unsecured creditors with little to no distribution, the Committee is also mindful of the fact that the deal is projected to yield funds for trade creditors that hold priority claims,” a court filing by the committee states. “The Committee also recognizes that the sale is projected to return similar value with less risk than other alternatives considered by the Debtors, including a wind-down of operations and liquidation of all assets, and preserves the going-concern value of the Debtors’ businesses with all attendant benefits to continuing suppliers, vendors, employees, and Maine’s fisheries and seafood industry.”
According to Cozy Harbor’s initial bankruptcy filing, the company had at least 20 unsecured creditors, the largest of which is East Coast Seafood, which was owed USD 1.37 million (EUR 1.2 million) by Cozy Harbor. Rounding out the top five unsecured creditors are .K. Marine dba Louisbourg Seafood, owed USD 803,000 (EUR 699,000); Whitecap International Seafood Exporters, owed USD 342,000 (EUR 297,000); Northern Ocean Sea Products, owed USD 265,000 (EUR 230,000); and Cape Bald Packers, owed USD 206,000 (EUR 179,000).
