Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Eurofresh Farms Seeks Chapter 11 Bankruptcy Protection for a Second Time
Author: Joel R. Glucksman
Date: February 14, 2013
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North American-based tomato-producer Eurofresh Farms has sought Chapter 11 bankruptcy protection in an Arizona courtroom. The filing marks the second time in four years that Eurofresh has sought protection under bankruptcy law.
The company announced its plan to sell assets to its major rival, NatureSweet Ltd., which has offered to purchase the majority of the company’s assets through a bankruptcy auction. Both companies are large growers and distributors of tomatoes. Eurofresh said the acquisition, pending the approval of a U.S. Bankruptcy Court, would take place quickly and will not hinder its current operations. In its court filing, the company blamed its financial difficulties on a slump in tomato prices. It also reported assets of between $10 million and $50 million, with liabilities of between $50 million and $100 million.
“We are pleased to have received this offer from a financially strong organization that will continue to invest in the business of growing and selling greenhouse tomatoes and cucumbers,” said Johan van den Berg, chief executive officer of Eurofresh Farms.
Eurofresh named a long list of unsecured creditors, including Southwest Gas Corp. which is owed $1.5 million, John Christner Trucking which is owed nearly $1.3 million, and a California packaging company owed $989,000. In its filing, the distributor estimated that it would lack the funds to repay its unsecured creditors.
Eurofresh was also forced to seek bankruptcy protection in 2009 citing excessive debt and operating issues, including high interest costs, limited production due to a plant virus, and rising energy costs. It exited bankruptcy as a reorganized company eight months after it filed in April and said that its operating issues have since been resolved.
The company said that none of Eurofresh’s 1,100 employees in Arizona will be laid off.
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