(UPDATED COVERAGE, April 24, 12:25 p.m.) Eurofresh Inc., doing business as Eurofresh Farms, Willcox, Ariz., filed for Chapter 11 bankruptcy April 21 as part of an agreement reached with investors including founder and current chairman Johan van den Berg.
The company’s board of directors agreed to file for bankruptcy April 14. Eurofresh owns Eurofresh Produce Ltd., which is also part of the bankruptcy filing.
According to court documents filed Tuesday, Eurofresh said it has between $100 million and $500 million in liabilities and lists its assets between zero and $50,000. Its largest creditor, Apollo Investment Management, New York, is owed $75.6 million, according to court documents.
Investment banks represent a majority of the creditors. But several companies in the fresh produce and allied industries also rank among Eurofresh’s creditors.
According to court documents, among the debts of Eurofresh:
- $1.4 million to John Christner Trucking, Sapulpa, Okla.;
- $678,000 to Fertizona, Willcox, Ariz.;
- $525,000 to Rene Produce LLC, Nogales, Ariz.;
- $105,000 to Blue Creek Produce LLC, St. Charles, Ill.;
- $65,000 to Chep Equipment Pooling Systems, Orlando, Fla.; and
- $58,000 to Veggies Inc., Nogales.
Paula Condes, saleswoman for Rene Produce, which packs under the Eurofresh label, said neither her company nor its grower partners are worried about getting paid or having their business with Eurofresh interrupted.
Condes’ son, Eddie Condes, is a regional sales manager for Eurofresh.
“I think everything’s going to be fine,” Paula Condes said. “They’re not behind on payments, and we’re still shipping greenhouse product for them on a daily basis."
Officials from the other companies either did not return calls for comment or declined to comment.
Mark Cassius, vice president of sales, said the company is working out a debt for equity trade with its bondholders and expects to have this agreement worked out over the next 90 days.
“It’s business as usual,” Cassius said during the United Fresh expo in Las Vegas. “We have healthy cash flow.”
The company said in a statement it expects to submit its plan during May and complete its financial reorganization during the third quarter of 2009.
Alvarez & Marsal, New York, is serving as the company’s exclusive investment banker and financial advisor in connection with the recapitalization.
“We are confident we will come out of this quickly,” said chief executive officer Dwight Ferguson.
Eurofresh’s growing and packaging operations in Willcox and Snowflake, Ariz., will continue to operate as normal during this reorganization, the company said in a statement, and customers, including restaurateurs, grocers and the public, should see no change in the quality of the company’s produce and services.
Cassius said the company’s debt accumulated through “organic growth” including an earlier recapitalization plan about four years ago and large-scale expansion that included 150 acres of greenhouses.
He said the company was also hurt by labor costs, pest and quality problems with its produce.
Eurofresh is a year-round producer and marketer of greenhouse tomatoes and fresh cucumbers and peppers and has two greenhouses covering more than 318 acres in Willcox and Snowflake, according to the release.
Markets Editor Andy Nelson contributed to this story.