New Bedford’s Mariner Seafood files Chapter 11, True North aims for stalking horse bid
New Bedford, Massachusetts, U.S.A.-based Mariner Seafood filed for Chapter 11 bankruptcy protection on Monday, 14 September, with Cooke Aquaculture’s True North Seafood lined up as the stalking horse bidder for its assets.
Court documents filed by Mariner Seafood acknowledge the company defaulted on its revolving USD 10 million (EUR 8.4 million) loan from Wells Fargo, and that the company had been exploring options such as selling assets or facilitating an equity investment to improve its cashflow and repay its debt.
Mariner commenced negotiations with True North Seafood in late June 2020, and “after extensive negotiations between Mariner and True North, the parties entered into an asset purchase agreement regarding the purchase by True North of all or substantially all of Mariner’s assets.”
True North has agreed to pay up to USD 2.2 million (EUR 1.9 million) of the accounts receivable, plus an additional plus USD 550,000 (EUR 464,000) for the costs of the purchase, in addition to paying some employee benefit obligations.
The company has around 130 employees, including eight in sales and management, and two facilities in New Bedford covering approximately 68,000 square feet. It had around USD 70 million (EUR 59 million) in sales in 2016, when it was the primary supplier of seafood to Blue Apron, but after losing its Blue Apron business, a separate USD 38 million (EUR 32 million) contract from a large national retailer in 2018, and the impact of the COVID-19 pandemic, the company was forced into default. In his affidavit, Flynn said the pandemic had pushed down the company’s sales by 46 percent between March and May. Flynn listed the company's assets as totaling between USD 10 million (EUR 8.4 million) and USD 50 million (EUR 42.1 million) in its Chapter 11 filing.
Mariners lists its total unsecured debt at around USD 7.8 million (EUR 6.6 million). Wells Fargo claims to be owed approximately USD 4.8 million (EUR 4.1 million) by Mariner Seafood. Other major liabilities for Mariner include USD 75,000 (EUR 63,000) owed to five cold storage facilities, and approximately USD 120,000 (EUR 101,000) weekly in payments to a staffing agency for its workforce.
In a list of its 20 largest creditors, RGK Goodwin is owed USD 898,600 (EUR 757,200), Staffing 360 Solutions is owed USD 786,600, Empire Staffing is owed USD 736,100 (EUR 620,300), Titania Seafood is owed USD 567,600 (EUR 478,300), Stavis Seafoods is owed USD 331,900 (EUR ), Seafreeze is owed USD 273,300 (EUR 200,000), Seatrade International is owed USD 250,300 (EUR 211,000), Darel is owed USD 200,000 (EUR 168,500), BlueGlacier is owed USD 152,000 (EUR 128,000), Oceans Fleet Fisheries is owed USD 123,400 (EUR 104,000), and Dalian Hongxing is owed USD 113,200 (EUR 95,400). Numerous other seafood companies, including North Atlantic Inc., Eastern Fish Company, Wheeler Seafood, Hallvard Leroy AS, and Sea Pearl Seafood are owed between USD 50,000 (EUR 42,100) and USD 100,000 (EUR 84,200) each.
Flynn did not immediately respond to a request for comment from SeafoodSource. The Office of the Mayor of New Bedford similarly did not respond to a request for comment in time for publication.
Joel Richardson, the vice president of public relations for Cooke Inc., issuing a comment on behalf of True North Seafood, confirmed his company’s intent to take over Mariner Seafood.
“True North Seafood Inc., the flagship brand of family owned Cooke Inc., intends to acquire the business of Mariner Seafood,” he said in an email. “True North Seafood is one of the largest and most trusted providers of seafood in North America. We believe with the combined resources of Mariner and True North, we will be more flexible and efficient in meeting the market demands for sustainable local seafood. We are confident that an acquisition will also assist to secure the local Mariner jobs in New Bedford.”
Under the terms of the asset purchase agreement, Mariner is required to consider other bids for its assets prior to consummating a sale to True North. The sale is required to close on or before 16 October, 2020, and in its filing, Mariner requested the judge appointed to oversee its Chapter 11 filing consider allowing bidding on an expedited bases "in order to ensure appropriate noticing and provide for solicitation of counteroffers."
Mariner Seafood specializes in processing New England species of wild-caught finfish and scallops, and its facilities are British Retail Consortium (BRC)-certified for food safety. It packages and markets products under the MarSelect brand.
This is a breaking news story and will be updated later Monday, 14 September.