Webster City, Iowa, U.S.A-based VeroBlue Farms, an aquaculture operation raising barramundi, filed for Chapter 11 bankruptcy protection in September, claiming less than USD 50,000 (EUR 43,800) in assets and between USD 50 million and 100 million (EUR 43.8 million and 87.7 million) in liabilities.
The bankruptcy declaration comes on the heels of a lawsuit filed by the company in July alleging fraud and mismanagement by five of the company’s former executives.
The suit alleges the executives – Leslie Wulf, Bruce Hall, James Rea, John Rea, and Keith Driver, who collectively controlled VeroBlue between 2014 and 2017 – of misappropriating millions of dollars from the company, including the appropriation of company funds for personal use. All five of the executives had left or been removed from their positions at VeroBlue by January 2018. VeroBlue has requested a trial by jury and seeks compensatory damages for both the allegedly misappropriated funds and for the devaluation of the company caused by the actions of its former employees.
In a response to the civil complaint, Wulf, Ted and James Rea, and Hall – without acknowledging any participation in VeroBlue’s allegations – all claim any actions taken while they were employed by VeroBlue were done under the auspices of their employment contracts. Those contracts were unfairly terminated, they said, when they reported sexual harassment in the workplace allegedly committed by a VeroBlue board member. In his own response, Driver said he had left the company before many of the incidents cited in the lawsuit occurred.
In its bankruptcy filing, VeroBlue lists Wichita, Kansas-based Broadmoor Financial as its primary creditor, and acknowledges Broadmoor’s unsecured claim of more than USD 47.8 million (EUR 41.9 million).
Norman McCowan, the former president and COO of Bell Aquaculture, is now serving the current president of VeroBlue.
The unique recirculating aquaculture system (RAS) used by VeroBlue was profiled by Mother Jones in 2017. The magazine reported that VeroBlue aimed to raise as much as 10 million pounds of barramundi annually – which would have made it North America’s biggest land-based fish farm.
