The trustee overseeing Blue Harvest Fisheries’ Chapter 7 bankruptcy proceedings has filed a motion to proceed with an auction of all the company’s remaining assets on 6 November, as some of the company’s fleet is reportedly already being scrapped.
Blue Harvest filed for Chapter 7 bankruptcy protection on 8 September, soon after the company shut down all of its operations. Chapter 7 bankruptcy means the company has officially ceased all of its operations and will be sold off to pay creditors, many of whom will likely see little compensation after what is left of Blue Harvest’s property is sold.
According to documents filed in the U.S. Bankruptcy Court for the District of Delaware – the court where the bankruptcy was filed – the outstanding principal amount as of the filing date on 6 October was USD 22.7 million (EUR 21.5 million). That number doesn’t include the reported USD 200 million (EUR 189.7 million) Bregal Partners has claimed it is owed, and cumulatively, Blue Harvest has listed between USD 100 million and USD 500 million (EUR 94.8 million and EUR 474.4 million) in liabilities across its many equity holders.
Court documents outline that potential bidders will have a deadline of 1 November to submit bids for the company’s remaining assets – which includes fishing vessels and permits – and must meet qualified bid requirements in order to successfully purchase any of Blue Harvest’s assets.
As the court prepares to auction off Blue Harvest’s remaining assets, portions of the fleet Blue Harvest purchased from Carlos Rafael were being scrapped in the harbor of New Bedford, Massachusetts, the New Bedford Light has reported.
Rafael was the former owner of a fleet of groundfishing vessels in New Bedford, who pleaded guilty in 2017 to falsifying fish quotas, tax evasion, and conspiracy. As a result of the court proceedings, Rafael was forced to sell off his fishing fleet – a portion of which Blue Harvest acquired in 2020.
Blue Harvest acquired the vessels in a push to build an “enduring, vertically integrated fishing company in New England,” then-CEO Keith Decker told SeafoodSource at the time. The company began the purchasing process for the vessels in 2018, navigating competing offers from the Buyers and Sellers Exchange (BASE) of New Bedford.
BASE’s stated goal at the time was to keep Rafael’s assets in the hands of “independent fishermen” to more broadly distribute the permits and vessels – before BASE said potential litigation from Blue Harvest stymied those efforts.
“Unfortunately, the folks that encouraged BASE to move forward have now withdrawn their commitments due to Blue Harvest’s litigation,” BASE said in 2020.
Now, three years later, the New Bedford Light is reporting that the fleet Blue Harvest purchased has already been scrapped as the company begins to liquidate its assets.
The paper reported that the Ilha Brava II, which has languished in the harbor for years following the court cases against Rafael, has already been cut up with hydraulic sheers and scrapped. It joins a number of other vessels that were already scrapped in New Bedford, the paper said.
The boat being scrapped and the need for maintenance of the vessels is highlighted by the ongoing bills court documents outlined. According to the interim sharing agreement, maintaining the fleet is an expensive proposition, as expenses including vessel maintenance and security are reaching USD 7,500 to USD 11,000 (EUR 7,123 to EUR 10,447) per week.
Photo courtesy of Blue Harvest
