Cranston, Rhode Island, U.S.A.-based Great Northern Products has filed for Chapter 11 bankruptcy protection.
Great Northern specializes in purchasing, importing, distributing, and exporting primarily frozen crab, shrimp, lobster, scallops, groundfish, and salmon processed by its partner plants in Canada, the United States, and South America. It is a supplier to domestic and international wholesale distributors, restaurant groups, supermarket chains, buying groups, and food producers.
The company filed its paperwork with the U.S. Bankruptcy Court for the District of Rhode Island on 28 February 2024, listing assets of between USD 1 million and USD 10 million (EUR 921,000 and EUR 9.2 million), and liabilities in the same range. Great Northern CEO George A. Nolan is listed as owning 100 percent of the enterprise.
Great Northern faces a hearing on 4 March 2024 during which U.S. Bankruptcy Court Judge Diane Finkle will decide whether to allow it to use cash collateral to cover the USD 788,934 (EUR 726,621) balance due on a loan issued by Berkshire Bank. The company said it has “no unencumbered assets available to secure alternative financing of its continued operation,” and that it is unable to obtain unsecured credit under the current terms of its financial obligations.
In 2018, Great Northern received a USD 15 million (EUR 13.8 million) credit line from Berkshire Bank, but its credit line was downsized in September 2023 to USD 5.5 million (EUR 5.1 million). Great Northern is also listed as holding a security interest on a USD 500,000 (EUR 460,000) Economic Injury Disaster Loan made during the Covid-19 epidemic, though court documents list the company’s payments on that loan as current.
Great Northern said it had negotiated the terms of its Chapter 11 agreement with Berkshire Bank and just needed the approval of the court to advance its revised plan. It asked for the court’s permission to allow it to collect and use assets in which Berkshire Bank has a security interest, including any proceeds of prepetition accounts receivable and cash on hand, for the payment of expenses.
In a supplementary budget filing, Great Northern listed forecasted weekly net cash flow of between USD 119,000 and USD 138,000 (EUR 110,000 and EUR 127,000) between February and March, and up to USD 204,000 (EUR 187,000) per week by the end of March 2024. That would enable the company to pay off its outstanding Berkshire Bank loan balance by the week of 12 April, according to the document.
The agreement between Great Northern and Berkshire Bank requires the company not to exceed its budgeted expenditures by more than 10 percent, to make USD 150,000 (EUR 138,000) payments each two weeks to Berkshire Bank, as well as a USD 5,000 (EUR 4,600) one-time fee, with an additional USD 2,500 (EUR 2,300) fee if the unpaid loan balance is not repaid in full by 17 May 2024. It also requires Great Northern to hit at least 75 percent of its sales projections made in its forecast through each two-week period.
The agreement would be nullified if the Chapter 11 case is dismissed or converted into a Chapter 7 case, which would likely involve liquidation of Great Northern’s assets and a dissolution of the company.
In its filing, Great Northern said it had made progress paying down its outstanding debt, with the company owing a balance of USD 6.3 million (EUR 5.8 million) roughly two years ago, USD 8.3 million (EUR 7.6 million) roughly one year ago, and USD 3.9 million (EUR 3.6 million) roughly six months ago. It said it had USD 2.1 million (EUR 1.9 million) of product inventory in five cold storage facilities in the United States and USD 623,000 (EUR 573,000) in gross receivables.
A Great Northern spokesperson told SeafoodSource the company had no comment on the filing.
