A new report in ProPublica, produced in partnership with the Northern Journal and the Anchorage Daily News, found an Alaskan public fund lost more than USD 29 million (EUR 27 million) on a deal that helped Rodger May purchase Peter Pan Seafoods.
The investigation centered around investments made by the Alaska Permanent Fund, an USD 80 billion (EUR 76 billion) savings account used by the state to provide residents with dividends. The fund was created with oil and mining revenue, and leadership at the Alaska Permanent Fund Corporation – a state-owned entity – worked to manage those assets and build its value.
According to ProPublica, one of those investments was in McKinley Capital Management, which then used a portion of that investment on Peter Pan. That money, totaling over USD 29 million, was a casualty in Peter Pan Seafoods’ bankruptcy in 2024.
Peter Pan Seafoods was pushed into receivership by Wells Fargo Bank, the single biggest lender to the company, in April 2024. That push came after Peter Pan was dealing with liens from fishermen and struggling to the point it was forced to close its King Cove seafood-processing facility for the 2024 “A” pollock season.
“We are saddened to inform our fishermen and the King Cove community that Peter Pan Seafood will not be able to operate our King Cove facility for the 2024 A Season. This is an unfortunate but temporary step,” the company said in a 12 January 2024 press release.
That “temporary step” ended up being more permanent than the company thought, and the King Cove facility is still sitting unused over a year after Peter Pan first closed it.
According to the report in ProPublica, McKinley Capital Management’s venture in Peter Pan started thanks to a partnership between it, former Peter Pan Owner Rodger May, and Los Angeles, California-based RRG Capital Management. The three groups purchased Peter Pan Seafoods from former owner Maruha Nichiro – which took a USD 27.9 million (EUR 26.5 million) loss on the sale – in November 2020.
The plan was to have a Washington-based fish company owned by May merge with Peter Pan, after which May would take on a leadership role. According to ProPublica financial projections, the three partners projected the investment would double in value by 2026.
However, ProPublica also found that McKinley Capital Management and RRG Capital Management had incomplete information about May’s history and background.
A “quality of earnings” report produced for RRG examined May’s company Northwest Fish and reported it was profitable – but also that company-supplied figures were unaudited. That report also commented on May’s partial ownership of Golden Harvest Alaska Seafood but failed to mention that the company had closed a processing plant in the Aleutian Islands.
Golden Harvest was also being faced with a lawsuit from fishermen arguing they were owned more than USD 2 million (EUR 1.9 million), ProPublica said.
“Separately, a forensic audit commissioned by some of the company’s investors found evidence of financial fraud, including ‘improprieties’ in financial submissions to a bank, according to a copy of the document obtained by ProPublica. The audit said that company officials submitted documents to the bank showing ‘the company was profitable when, in fact, it was not,’” the report states.
According to ProPublica, McKinley Capital Management missed the Golden Harvest lawsuit and issues during the due diligence process and also missed an alleged FBI investigation into issues at the company.
After McKinley went through with the purchase, Peter Pan quickly made a splash in the seafood industry and at one point announced a base price of USD 1.10 (EUR 1.04) per pound for sockeye salmon in 2021, shaking up the salmon world by becoming the first company to announce a price months before other companies, and at a level significantly above the USD 0.75 (EUR 0.71) base price in 2021.
The company took similar steps in 2022, announcing a USD 1.00 (EUR 0.95) based price in June – again well before the normal announcement date.
Despite the big moves early, Peter Pan got caught up in an industry-wide downturn in 2023 caused by low seafood prices and high costs. The company also grappled with lots of leadership turnover.
In May 2022, Peter Pan replaced its chief financial officer as Mike Galan took over for Mark Foster, who was hired as Peter Pan’s CFO in March 2021. In March 2021, Peter Pan announced that Barry Collier would step down as CEO. The company went on to hire several new executives, including former Silver Bay Seafoods COO Jon Hickman to serve as its vice president of Alaska operations.
Then, in September 2022, Rich Wolverton, who was hired as executive vice president of sales, departed the company. Hickman would also leave the company in March 2023.
In the wake of the severe downturn in 2023, Peter Pan ended up bankrupt, with its assets up for auction. May became one of the highest bidders pursuing the company, and won an auction for most of the company’s assets in September 2024. A court battle came soon after the auction, as some investors pushed for Silver Bay Seafoods to take ownership after its bid was within 0.05 percent of May’s.
Fishermen were also pushing for a different owner than May, and a letter from 92 fishermen in Alaska said they would never work with May again after he failed to live up to his promise.
“The goal of it was for the receivers, or whoever the power is making these decisions, to see the overriding sentiment here is that having Rodger May involved isn't going to work,” Springer, one of the organizers of the letter writing effort, told SeafoodSource. “Our goal was to get Rodger to back off and to get the receivership to understand that it’s futile for him to be making this bid. The letter shows he has no fleet and that nobody is going to sell him any fish. So why even bother?”
Ultimately, Silver Bay Seafoods purchased some of the facilities from May, adding to its existing suite of former Peter Pan processing facilities.
As ownership of the various Peter Pan facilities continues to be worked out, McKinley Capital Management and the Alaska Permanent Fund are still out the USD 29 million investment it made in the company – and the King Cove processing plant remains empty and unused.
