East Coast's largest groundfish company has filed for bankruptcy, according to records in U.S. federal court in Delaware, leaving employees without a job as it shutters all of its locations and concluded an eight-year private equity (PE) roll-up of New Bedford's fishing industry.
Blue Harvest Fisheries unexpectedly filed for Chapter 7 bankruptcy on September 8, meaning it will most likely have to close and liquidate all of its company assets. The food giant quietly made a decision to stop its fishing operations on Sept. 1 and has yet to make a public announcement. The "secretive" move left the industry regulators, fishermen and city officials in the dark as it abruptly grinds to a halt.
A lawyer who reviewed the company's court records told the non-profit news outlet the New Bedford Light: "They weren't just underwater. It looks like they had long since drowned."
Blue Harvest has been reportedly laying off workers since May when it shut down its processing plant. A total of 64 employees were left out of work after the plant on the New Bedford waterfront closed, according to Undercurrent News. Then in mid-August, 17 more staffers were fired. The company's fishermen, who were employed as independent contractors, were left with no support after being let go. "There's no severance check," lamented Randy Waycotte, captain of a Blue Harvest groundfish vessel. "People have got bills, families to support. They haven't told us anything except that we're no longer working." (Related: A torrent of layoffs – Here are 16 large companies that have just announced mass terminations.)
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Meanwhile, Mayor Jon Mitchell expressed his dismay at the company's "hushed" move to "close shop." "Blue Harvest's decision to shutter its operations is, for sure, disappointing and disruptive to the lives of its employees." He promised to work it out to ensure the federal permits associated with the company's vessels remain associated with New Bedford-based commercial fishing interests, "to soften the impact."
The company filed nine separate bankruptcy cases that included 40 individual limited liability companies (LLCs). According to the filings, Blue Harvest's assets range from $50 million to $100 million and its liabilities are estimated between $100 million and $500 million.
Blue Harvest Fisheries is "getting off the hook"
Unlike Chapter 11, which grants the company a chance to restructure, Chapter 7 bankruptcies usually lead to liquidation. If the company proceeds with the process and the assets do not cover its debts, it will get off the hook without paying all the money it owes. "I guess we're not getting paid," said Randy Martin, a machinist at Harbor Hydraulics, which is located next to the Blue Harvest facility. He added that the fishery owed "a lot of companies a lot of money."
Moreover, questions have long circulated about the firm's ties to foreign investors. At the top of the long chain of subsidiaries is "Blue Harvest Fisheries Partners, LLC." PE firm Bregal Partners is listed as owning 89.5 percent of the parent company that owns 92.9 percent of all other subsidiaries. This includes the company's vessels, permits and other assets. Bregal is an investment arm of a firm owned by the family of Dutch billionaire industrialists, the Brenninkmeijers.
Foreign investors are limited from owning more than 25 percent of a U.S. fishing vessel, the New Bedford Light reported and according to the local outlet, it is still unclear if Bregal, Brenninkmeijer family, or Blue Harvest violated the foreign ownership limits. The particular maritime law is notoriously difficult to enforce, relying on a company's own assurance that it is in compliance, it added.
"If they violated the law, it should be investigated," said Eric Hansen, New Bedford's representative to the government's regional fisheries regulatory council.
The remaining 10.5 percent of the parent company is owned by an array of former Blue Harvest executives, lawyers and financiers, including Michael Arougheti, CEO of New York finance company Ares Management as well as former Blue Harvest CEOs Keith Decker and Jeffery Davis.
It also includes Louise Lischewski, the wife of former Bumble Bee CEO Chris Lischewski, who assumed ownership of his stake in the company after he was sentenced to 40 months in prison in 2020 for conspiring to fix canned tuna prices and was freed in November 2022. Each of them owns less than two percent of the company.
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