Elverta, California, U.S.A.-based Sterling Caviar has entered receivership, with creditors claiming the company owes them more than USD 23 million (EUR 21.5 million).
The company, which was purchased by Eugene Fernandez in October 2020 for USD 6.2 million (EUR 5.8 million) from Stolt-Nielsen via his holding company Hyde Road Agricultural Associates, received a USD 14 million (EUR 12.9 million) loan from CapitalView Investment Partners and Hunter Street Partners to expand its caviar operations at the former Lazy Q Fish Ranch in Dixon, California, U.S.A., in April 2020.
Fernandez told SeafoodSource at the time he wanted to significantly ramp up production and distribution of U.S.-sourced caviar in the domestic market and that the purchase of one of the oldest and largest caviar producers in the U.S. would accelerate that effort.
However, court documents show CapitalView and Hunter requested Sterling be placed into receivership in January 2024 and that a judge in Solano County, California, granted that request soon after, according to the Sacramento Business Journal. The two private equity firms claim Hyde Road ceased making debt payments in early 2023 and that they had concerns Sterling’s sturgeon – valued at USD 24 million (EUR 22.5 million) – were not being properly cared for.
“Ongoing financial issues have left the fish not having sufficient feed or aeration, meaning their survival is in jeopardy,” the creditors claimed in court documents, which stated the sturgeon had gone up to two weeks without being fed.
In a response to the filing, Fernandez disputed the allegation regarding mistreatment of its fish.
“I would never permit the company to do anything to harm the fish or any other assets of the company,” Fernandez wrote. “I would only be harming myself.”
The creditors wrote they had had “significant concerns about certain transfers made by the defendants and unexplained discrepancies in the financial reporting provided by the Hyde Road Entities.”
Fernandez unsuccessfully opposed the move to place Sterling into receivership, arguing Hyde Road had repaid USD 6.4 million (EUR 6 million) thus far and that Sterling’s inventory and other assets covered the remainder of the outstanding balance.
A separate creditor, Sachem Capital Corp., filed a notice of default against Sterling for USD 3.15 million (EUR 2.95 million), with the company’s 26-acre headquarters and processing facility in Elverta listed as collateral. Sachem has postponed a foreclosure action while it works with Sterling to resolve the dispute.
On 29 April, the appointed receiver requested additional ...
