With its three Alaska processing plants closed, Great Pacific Seafoods filed for Chapter 7 bankruptcy on Sunday.
The Seattle-based company’s assets will be liquidated and sold after a Chapter 7 trustee is appointed by the Western Washington federal bankruptcy court. As of Sunday, the company has ceased all operations, according to a news release issued Sunday.
Daniel DeMatteis, Great Pacific Seafoods’ president, said in a statement the company’s secured lender did not renew the line of credit it extended to Great Pacific Seafoods for this year. Without the line of credit available, Great Pacific Seafoods could not get the working capital to start the season, he said.
“This was a very difficult decision, but we believe we have no other choice given the financial performance we experienced last year,” DeMatteis said in the statement.
Gross revenue fell between 2014 and 2015 from approximately $26.5 million to $21.2 million, according to the bankruptcy filing. In the first nearly six months of 2016, the company only brought in approximately $2.6 million in gross revenue.
The Russian embargo on North American seafood products and the combination of the Japanese yen’s valuation and Japanese demand pushed down the price of roe, which “was a serious blow to our ability to generate sufficient cash to continue to operate,” DeMatteis said in the statement. The increase in the minimum wage and cuts to the J-1 visa program, which provided temporary visas to foreign workers and students, also played into the bankruptcy, according to the statement.
The company listed more than 700 creditors, ranging from claims in the millions in secured property to less than $100 in phone bills.
Great Pacific Seafoods operated plants in Kenai, Whittier and Anchorage and a dock in Kasilof, typically employing approximately 300 people at the peak of the fishing season. Until last year, the company also ran a buying operation in Kotzebue, but chose not to return for the 2015 season. Great Pacific’s plant was the only processing plant in Whittier and saw more than 100 million pounds of fish cross its dock in 2014, according to an industry report from the Alaska Salmon Alliance.
The company has the greatest financial interest in the Kenai processing plant at approximately $3.2 million, according to the bankruptcy filing. The Anchorage plant and the Whittier plant are worth approximately $2.7 million each to the company, and the Kasilof dock is worth approximately $800,000.
The company also owned three condominiums in the Begich Tower in Whittier. All its property holdings together are worth an estimated $9.49 million, according to the bankruptcy filing. The company also listed approximately $2.9 million in personal property, including skiffs and buoys, trucks and vans packing material and frozen fish.
Reach Elizabeth Earl at elizabeth.earl@peninsulaclarion.com.
