NEW BEDFORD — Blue Harvest Fisheries has filed for Chapter 7 bankruptcy, according to records in U.S. federal court in Delaware, concluding an eight-year private equity roll-up of New Bedford’s fishing industry.
It is a move that some had expected following the company’s quiet decision to shut down all fishing operations on Sept. 1. The company has still not made a public announcement, leaving industry regulators, fishermen and city officials in the dark as the largest groundfish company on the East Coast abruptly grinds to a halt.
The company filed nine separate bankruptcy cases that included 40 individual LLCs. According to the Sept. 8 filings, the company’s assets range from $50 million to $100 million and its liabilities are estimated between $100 million and $500 million. Chapter 7 bankruptcies usually lead to liquidation.
“They weren’t just underwater. It looks like they had long since drowned,” said one attorney, who asked not to be named because he is not involved in the case, but reviewed the documents.
Questions have long circulated about Blue Harvest’s ties to foreign investors. The filings bring some transparency to the opaque, private-equity backed business that launched in 2015 and rapidly expanded to become the single-largest permit holder in the New England groundfish industry.
At the top of the long chain of subsidiaries is “Blue Harvest Fisheries Partners, LLC.” Private equity firm Bregal Partners is listed as owning 89.5% of the parent company that owns 92.9% of all other subsidiaries, including the company’s vessels, permits and other assets. Bregal Partners is an investment arm of a firm that is ultimately owned by one family of Dutch billionaire industrialists — the Brenninkmeijer family.
Foreign investors are limited from owning more than 25% of a U.S. fishing vessel. It is still unclear if Bregal Partners, the Brenninkmeijers or Blue Harvest violated the foreign ownership limits. The particular maritime law is notoriously difficult to enforce, relying on a company’s own assurance that it is in compliance.
“If they violated the law, it should be investigated,” said Eric Hansen, New Bedford’s representative to the government’s regional fisheries regulatory council.
The remaining 10.5% of the parent company is owned by an array of former Blue Harvest executives, lawyers and financiers. It includes Michael Arougheti, CEO of New York finance company Ares Management, and former Blue Harvest CEOs Keith Decker and Jeffery Davis.
It also includes Louise Lischewski, the wife of former Bumble Bee CEO Chris Lischewski, who assumed ownership of his stake in the company after he was sentenced to 40 months in prison in 2020 for conspiring to fix canned tuna prices. He was released from prison in November of 2022.
Each owns less than 2% of the company.
Unlike Chapter 11 bankruptcy, which grants the company a chance to restructure, a Chapter 7 bankruptcy is a closure and usually means a liquidation of all the company’s assets in order to pay back debts. If the assets don’t cover the debts, the company can essentially walk out on the tab.
“I guess we’re not getting paid,” said Randy Martin, a machinist at Harbor Hydraulics, which abuts the Blue Harvest facility on the Fairhaven side of the port. He said Blue Harvest owed “a lot of companies a lot of money.”
The bankruptcy filings list that the company has between 1,000 to 5,000 creditors.
On Monday, the gates to the Blue Harvest facility were locked shut and a white security van idled in the vacant parking lot. The remaining boats in the Blue Harvest fleet were tethered to the dock. They have been there since Sept. 1, when the company told its fishermen that it was shutting down all fishing operations.
“It doesn’t make sense. That’s the consensus here,” said Hansen, of the fisheries regulatory council. “They took a good portion of the groundfish fishery and put it on the shelf.”
Former Blue Harvest spokesman Bob Vanasse had no answers. He says the company cut ties with his communications firm, Stove Boat Communications, which has handled public relations for the company for over a year. Questions were deferred to Bregal Partners, which could not be reached for comment.
Undercurrent News, a fishing industry trade publication, reported that 17 staff were laid off in mid-August. In May, Blue Harvest shuttered its 220,000 square-foot processing plant on the New Bedford waterfront, laying off 64 workers.
But the numbers aren’t as clear for the company’s fishermen, who are technically employed as independent contractors. They say Blue Harvest left them high and dry.
“There’s no severance check,” said Randy Waycotte, captain of a Blue Harvest groundfish vessel. “People have got bills, families to support. They haven’t told us anything except that we’re no longer working.”
Blue Harvest was founded in 2015. Flush with private equity capital from Bregal Partners, a firm with a focus on acquiring “fishing rights,” the company first entered the lucrative scallop industry, later expanding into groundfish and importing fish. It purchased mid-sized fleets up and down the East Coast, and centered its operations on a 220,000-square-foot processing plant on the New Bedford waterfront. In 2020, it acquired 12 vessels and 27 permits from Carlos Rafael, who at the time was serving out a four-year sentence for fraud related to mislabeling fish, and was forced to sell his fleet.
The expansion was led by former CEO Keith Decker, who resigned in 2021. And under the current CEO, Chip Wilson, Blue Harvest began selling off its assets.
Blue Harvest finished selling its 15 scallop boats earlier this year, which were purchased by a diverse assortment of smaller-scale New Bedford businesses. It is estimated that the company netted about $100 million in total on the sales. At the time, Blue Harvest cast the move as part of its plan to double-down on its groundfish operations.
But now, it seems, the company will likely liquidate those assets, too.
As fishermen formerly working on Blue Harvest vessels worry about their livelihoods, industry leaders forecast the closure will churn up troubled waters for other fishing businesses. Blue Harvest owns about 13% of the total groundfish permits, including over 20% of certain high-volume species like haddock and redfish. The company controls a large portion of the market, and the closure throws a wrench into an already fragile supply chain.
“In the short term, it’s not good,” said sector manager Hank Soule, who handles the leasing of permits for Blue Harvest and other companies. “Blue Harvest has a significant fraction of the groundfish that they are removing from the marketplace,” which he said will cause supply shortages, ”pricing issues” and ultimately create a void in the domestic-caught groundfish market that could be filled with cheaper, imported fish.
For the city, the top priority is ensuring the vessels remain in New Bedford. When Blue Harvest acquired a large portion of its groundfish fleet from Rafael, the company pledged to keep the vessels in New Bedford; “retaining local fishing jobs and preserving the port’s long-standing ties to the groundfish fishery,” the company wrote in a press release at the time.
Now, it’s no longer guaranteed that the boats will remain in New Bedford.
“Blue Harvest’s decision to shutter its operations is, for sure, disappointing and disruptive to the lives of its employees,” wrote mayor Jon Mitchell in a statement provided before the bankruptcy filings were made public. “To soften the impact, we will work to ensure the federal permits associated with the company’s vessels remain associated with New Bedford-based commercial fishing interests.”
“It’s not good news. But I’m optimistic that the vessels will quickly be put back into use,” said Gordon Carr, director of the New Bedford Port Authority. “We still have a strong processing industry here in New Bedford. We want to sustain that.”
Editor’s note: This story was updated on Sept. 11, 2023, to provide additional information.
Email fishing industry reporter Will Sennott at firstname.lastname@example.org.