Creditors, investors likely to be wiped out by Blue Harvest’s bankruptcy
Creditors of Blue Harvest Fisheries are not expected to recoup much, if any, of the money owed to them by the New Bedford, Massachusetts, U.S.A.-based Blue Harvest Fisheries, which filed for Chapter 7 bankruptcy protection on 8 September.
The company, which filed 40 separate Chapter 7 applications for its various subsidies, cumulatively listed more than 2,200 parties as creditors. The list includes fishermen who had worked for Blue Harvest, municipalities from Georgia to Maine, seafood companies such as Eastern Fisheries and Atlantic Capes, and hundreds of small- and medium-sized support businesses, including the companies supply stores, shipyards, and mechanics.
But Blue Harvest and its subsidiaries have been stripped of most of their assets and very likely do not have enough to settle even a fraction of its debts. Cumulatively, Blue Harvest has listed between USD 100 million and USD 500 million (EUR 94.6 million and EUR 473 million) in liabilities, against assets valued at USD 50 million (EUR 47.3 million) to USD 100 million.
“No property appears to be available to pay creditors,” the company wrote in a 13 September notice to its creditors. “Creditors cannot demand repayment.”
New York City-based private equity firm Bregal Partners, which owns nearly 90 percent of Blue Harvest, sold off most of the company’s assets before the bankruptcy filing, including its processing facility for USD 20 million (EUR 18.9 million) and its 15 scallop vessels for around USD 100 million.
Eileen Appelbaum, the co-director of the Center for Economic and Policy Research, told The New Bedford Light those funds have been pocketed by the private equity firm and will not be available to repay the nearly 1,000 small businesses owed money by Blue Harvest.
“They buy a company, they strip it, they declare bankruptcy and they walk away,” Appelbaum said, describing a common practice of private equity firms. “[Creditors] are left high and dry. That money is gone.”
Blue Harvest’s ownership of its groundfish permits …
Photo courtesy of Blue Harvest Fisheries