For additional information please see "EuroFresh wants to pay PACA claims, continue operations" and "UPDATED: NatureSweet plans to buy EuroFresh Farms assets"
(UPDATED COVERAGE, Jan. 31) Greenhouse tomato marketer NatureSweet’s plan to buy competitor EuroFresh — announced on Jan. 28, one day after EuroFresh filed for Chapter 11 bankruptcy protection — will be eased by a judge’s decision to allow the beleagured company to continue operating.
Judge Eileen Hollowell cleared the way for the Willcox, Ariz., greenhouse company to continue operating pending the sale to San Antonio-based NatureSweet in a series of orders filed Jan. 29.
The sale price listed in court documents is $51.1 million. A hearing on the bidding portion of the sale process is set for Feb. 22. Attorneys representing EuroFresh did not respond to calls for comment.
The sale includes 318 acres of EuroFresh tomato/cucumber greenhouses, and the company’s other real and intellectual property.
“The purchase agreement provides that the purchaser will offer to employ all employees, provided that the purchaser will not be obligated to retain employees after the closing date,” a EuroFresh motion states.
Good PACA news
Produce suppliers who billed Eurofresh under the Perishable Agriculture Commodities Act before the bankruptcy filing have a good chance of being paid. EuroFresh asked for and received the judge’s approval to pay those claims, which it estimates at $600,000.
Hollowell also approved EuroFresh requests to continue paying employees’ wages and benefits as well as shipping, warehouse and other logistics expenses.
In addition, she prohibited utility companies from cutting off service pending a Feb. 15 hearing. The grower-shipper owes Southwest Gas Co., Tucson, Ariz., $1.5 million, according to a list of creditors.
Debts and assets
Total claims against EuroFresh, according to court documents, are $69.5 million. Of those, $450,000 are employee wages and benefits incurred before the bankruptcy filing. Unsecured, nonpriority claims total $10.7 million. Secured claims total $58.3 million.
The company reported assets of $10.7 million, which all fell into the “personal property” category.
The EuroFresh assets sheet states that the company’s current interest in its real property is unknown and lists the real property value of $51.1 million as a secured claim.
Accounts receivable prior to the bankruptcy filing totaled $9.3 million. Retailers on the accounts receivables list include Costco, Kroger, Safeway, Sam’s Club, Supervalu and Wal-Mart.