OBI Seafoods and its CEO, John Hanrahan, have filed documents backing a request from Peter Pan Seafoods Co-Owner Rodger May to amend the receivership it entered by court order in April 2024.
Peter Pan entered receivership on 25 April by Wells Fargo, its largest creditor. May, who is also Peter Pan’s president and chief growth officer, has been fighting with the Stapleton Group, a financial consultancy firm appointed as controller of the company’s assets, over its efforts to sell some of the company’s assets to rival Silver Bay Seafoods.
According to court documents, Silver Bay has offered USD 35 million (EUR 32.1 million) for Peter Pan’s canned seafood inventory and a one-third share in the Kent Warehousing and Labeling (KWL) facility in Kent, Washington.
May countered with a USD 36 million (EUR 33 million) offer for the same assets and made separate offers of USD 31 million (EUR 28.5 million) for the canned stock alone, USD 4.6 million (EUR 4.2 million) for the interest in the KWL facility alone, and USD 4.3 million (EUR 4 million) for Peter Pan’s Port Moller, Alaska, processing plant. Alternatively, May offered USD 58 million (EUR 53.3 million) for all of Peter Pan’s inventory, as well as the Port Moller plant and the share in the KWL warehouse.
On 13 June, OBI Seafoods, a Peter Pan creditor, backed May’s bid to modify the receivership to provide him the ability to be notified of efforts to sell Peter Pan assets and bid on them if he chooses. The company also claimed the current receivership order is “unclear and potentially contrary to Washington’s Receivership Act.”
“The receiver should not have any rights greater than what is allowed by Washington law,” OBI said. “The receivership order would purport to allow the sale of a membership interest without notice, without regard for contractual rights of co-owners and without regard to Washington’s Limited Liability Companies Act; consequently, it should be struck.”
In a supplementary filing on 14 June, Kenneth W. Hart, KWL’s corporate counsel, said he had not been notified of the receivership, despite that being a legal requirement if the Stapleton Group initiates a sales process for Peter Pan’s stake in the KWL facility.
Additionally, a sale of the KWL warehouse could potentially run afoul of the Sherman Antitrust Act, OBI claimed, citing a statute of the law concerning collaborations between competitors. OBI obtained a two-thirds interest in the KWL facility following the merger of Ocean Beauty Seafoods and Icicle Seafoods forming OBI Seafoods in 2020.
“The KWL operating agreement is a collaboration among competitors. Its operating agreement, therefore, has specific, agreed-upon behavioral language … Thus, any successor to Peter Pan must comply with both the KWL operating agreement and Section 1 of the Sherman Act,” it said.
In a separate filing, KWL said it is owed USD 1.3 million (EUR 1.2 million) from Peter Pan in unpaid storage fees.
An OBI spokesperson said the company does not comment on active legal matters, but in its 13 June filing, it argued the court should tread carefully in granting the Stapleton Group powers to liquidate Peter Pan’s assets.
“Peter Pan’s operations have a long history and are important to its many constituents. Any decision made by the receiver and approved or allowed by this court will have a significant impact on many people and communities and, therefore, should be considered and implemented with proper notice and an opportunity to be heard. Those decisions should not be handled in private, without notice and without due process afforded to all impacted persons,” it said.
