Popular food brand files Chapter 7 bankruptcy, heads to liquidation | Latest International Breaking News

When a retailer goes out of business it usually follows a predictable arc that sharp customers can spot. You often see signs like dwindling inventory, certain sizes being sold out, and fewer employees working in the store. 

With a public company, it can be even easier because those companies must share their financials. It’s usually a gradual process, but repeated quarters with losses and dwindling cash reserves start to paint a picture of a company in trouble.

Related: Popular retailer moves from Chapter 11 bankruptcy to liquidation

Take a recent bankruptcy like Bed Bath & Beyond. Analysts have had concerns about the company going back to the covid days. It was easy to see that the retailer had seen steady drops in sales while also starting to run out of cash.

Once it actually filed Chapter 11, it became clear that the company needed a major cash infusion in order to keep operating. That did not happen and the company went relatively quickly from attempting to reorganize its business to liquidating it.

With private companies, the end can be more sudden. That’s especially true when the company isn’t consumer-facing like a wholesaler or a manufacturer. 

Blue Harvest Fisheries may not be a name everyone knows, but it was a massive operation that was intended at its 2015 creation to dominate the New England fishing industry. That was a bold goal that it never achieved. And, now, after suspending its fishing operations in September, the company has filed for Chapter 7 bankruptcy and appears headed toward liquidation.

Blue Harvest sold to grocery chains.

Image source: Smith Collection/Gado/Getty Images

Blue Harvest nears the end    

The company, which sold fish to a number of grocery chains around the country, had a bold mission statement.

“Blue Harvest is transforming commercial fishing into an industry that is defined by sustainability, governed by transparency, and bound to the promise of delivering excellence to every plate and every person who loves seafood as much as we do,” the company shared on its website.

Marketing itself as an environmentally responsible company, Blue Harvest tried to reinvent its industry built around sustainable business practices.  

“We believe in the careful management of fisheries as natural resources that we all have an obligation to protect. And because we own responsibility for the entire process — from our fleet to your table — we can help ensure we’ll be fishing for generations to come,” the company added. 

Those were noble ideas, but they did not work out financially.

The company filed nine separate bankruptcy cases that included 40 individual LLCs, the New Bedford Light reported. According to the filings, “the company’s assets range from $50 million to $100 million and its liabilities are estimated between $100 million and $500 million.”

Blue Harvest vendors, workers face bad news

Under a Chapter 7 filing, a company’s assets will be liquidated and used to pay off creditors. In theory, someone could buy some of the assets and keep parts of the business operating under new owners.

It’s unclear what the company’s past customer relationship would be worth as Blue Harvest has not been serving those customers since early September. It’s likely that its biggest customers have moved on to new vendors, greatly diminishing the value of the company at auction. 

Blue Harvest fishermen were independent contractors and did not receive any sort of severance.

That’s not likely to change due to the company’s lack of assets.

“No property appears to be available to pay creditors,” the company wrote in a Sept. 13 notice to its creditors. “Creditors cannot demand repayment.”

Permits owned by the company could keep rivals from fishing in certain areas until those rights are sold at auction. That could lead to higher prices for consumers.

“In the short term, it’s not good,” sector manager Hank Soule, who handles the leasing of permits for Blue Harvest and other companies told the New Bedford Light. “Blue Harvest has a significant fraction of the groundfish that they are removing from the marketplace,” which he said will cause supply shortages, ‘pricing issues’ and ultimately create a void in the domestic-caught groundfish market that could be filled with cheaper, imported fish.”

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