Silver Bay Seafoods has won its USD 27.3 million (EUR 25 million) bid to acquire the frozen seafood assets of Peter Pan Seafoods, which entered receivership in April 2024.
On 5 August, King County Superior Court Commissioner Henry Judson approved the sale of the so-called Britestack assets – nearly 750,000 cases of canned salmon – despite an ostensibly higher bid from Peter Pan Co-Owner Rodger May.
With the approval of the sale, arranged by the Stapleton Group, Peter Pan’s court-appointed receiver, and Peter Pan’s selling agent, Hilco Corporate Finance, Silver Bay will take on the obligation of fulfilling a yet-to-be-completed U.S. Department of Agriculture contract previously won by Peter Pan. It will also pay a USD 1.3 million (EUR 1.2 million) lien owed by Peter pan to Kent Warehouse and Labeling, which is storing the product.
The sale came despite vehement opposition from May, who argued his USD 30.6 million (EUR 28 million) bid was higher and represented a better return for the estate, which he claims owes him USD 40 million (EUR 36.6 million). May acknowledged lowering his initial bid by USD 438,000 (EUR 401,000) due to previously undisclosed sales of some products to Silver Bay.
May said he would aim to sell the canned seafood via his seafood and beef wholesale company, Authentic Wagyu. May said his offer was better than Silver Bay’s because it included USD 23 million (EUR 21.1 million) in cash payments, versus Silver Bay’s offer of roughly USD 16 million (EUR 14.7 million) in cash. Additionally, May said he would make his payment within five days of the deal closing, versus a due date of 1 October for Silver Bay’s payment of the first 50 percent of the total amount due.
“There is no doubt that the May offer yields significantly higher proceeds for the estate and its creditors,” May’s attorney, Christopher Wion, wrote in a 5 August brief.
Nevertheless, Judson chose Silver Bay’s offer.
“The court finds that the transactions described in the agreements is in the best interest of the parties to this case and reasonably maximizes the recovery of value from the Britestack assets,” Judson wrote in his decision.
Judson is now dealing with two separate issues related to the receivership: a request by Regence Group Administrators, the provider of health insurance to Peter Pan’s 12 employees, that the estate guarantee reimbursement to it for any costs paid, as well as a push by May to void the Stapleton Group’s hiring of Hilco as its marketing agent.
In the first issue, Regence is requesting Judson order the Stapleton Group to pay Peter Pan’s medical-related bills on time or, otherwise, grant it priority status as a secured creditor.
In the second, May argued Hilco has a conflict of interest as an unsecured creditor and that it has withheld information about the estate from him.
“Since the beginning of this receivership, Hilco has supported and negotiated a number
May also opposes the approval of a new contract between the Stapleton Group and Hilco that would pay Hilco a 2 percent commission for any sales it facilitates, which will also be retroactively applied to previous sales undertaken during Peter Pan’s receivership.
“Any money flowing to Hilco is coming out of May’s pocket,” Wion wrote.
If Judson approves Hilco’s status, May has requested its contract be terminated upon full repayment of Peter Pan’s debts.
“This is the most reasonable, pragmatic, and equitable approach given that the estate will not be able to sustain or justify the cost, particularly where it comes at May’s expense, in his capacity as the resulting senior secured creditor,” Wion wrote.
