EuroFresh keeps going with offer to buy on table - The Packer

EuroFresh keeps going with offer to buy on table

01/30/2013 11:19:00 AM
Coral Beach

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.

Criminal case payments

In August 2011 the U.S. filed criminal charges against EuroFresh, charging the company with employing illegal immigrants from July 2000 through February 2007.

EuroFresh pleaded guilty to the charges, and a plea agreement put the company on five year’s probation and imposed a $600,000 fee (over five years).

The court judgment stated the amount was equal to the proceeds EuroFresh gained by employing the illegal immigrants.

Diagram of a downfall

Motions from EuroFresh detail the company’s financial troubles, which date back to at least 2009 when it filed for Chapter 11 bankruptcy debt reorganization.

That reorganization was necessary because of a “highly leveraged balance sheet,” high interest costs, reduced production volumes because of a plant disease, and high energy prices in 2005, 2006 and 2008, according to the motion.

“The debtor emerged from Chapter 11 in November 2009 with a lower level of debt and new ownership comprised of its pre-petition bondholders and Johan van den Berg who invested new capital,” according to the motion.

EuroFresh officials state in the motion that the company has been in default since late 2010. In 2012 they began looking for a buyer.

In the summer of 2012 EuroFresh representatives contacted 54 potential bidders. They negotiated confidentiality agreements with 31 of them.

EuroFresh narrowed the field to eight and had “detailed calls and meetings,” which resulted in four entities submitting bids. Ultimately those four bidders declined to continue the process, according to EuroFresh court filings.

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