Both U.S. senators in Massachusetts and one congressman signed a letter Monday demanding transparency in Blue Harvest Fisheries’ bankruptcy — accusing the private equity firm that owned the company of stripping its assets, failing to pay over $100 million in debts and harming countless small businesses in the New Bedford area.
“After years of putting private equity profits ahead of workers and small businesses, Bregal Partners — which owned and stripped Blue Harvest of its assets — owes the community an explanation,” wrote Sen. Elizabeth Warren, Sen. Ed Markey and U.S. Rep Bill Keating. They each signed the joint letter addressed to Charles Yoon, managing partner of Bregal Partners, which owned 89.5% of New Bedford-based seafood giant Blue Harvest Fisheries prior to the company declaring bankruptcy in September of 2023.
In the summer of 2023, The Light detailed Blue Harvest’s financial moves in a series of stories before and immediately following the bankruptcy filing.
“Bregal’s actions with respect to Blue Harvest have left local small businesses and workers holding the bag after your firm spent years price gouging, mistreating workers, saddling consumers with junk fees, and stripping assets,” the letter continued. “Your actions have harmed New England’s fishing industry and left over 1,000 independent contractors, businesses, and other creditors saddled with debt.”
Blue Harvest Fisheries 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.
The company was a leading force in consolidating New England’s fishing industry. The letter noted that, as mergers and acquisitions decreased the number of employers by over 30% during the last decade, “companies like Blue Harvest demanded longer working hours from fishermen while reducing their income and diverting profits that should have been supporting the local economy.”
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Sens. Warren and Markey previously criticized the business practices of Blue Harvest Fisheries in July of 2022 in response to an investigation by The New Bedford Light. The Senators at the time condemned the lax antitrust policies that enabled Blue Harvest’s expansion over the fishing industry.
At its peak, Blue Harvest was the single-largest permit holder in the New England groundfish industry and a major player in the scallop industry. But in September of 2023, it abruptly shut down and filed for chapter 7 bankruptcy — putting more than 100 people out of work and locking up as much as 20% of the groundfish quota as its assets were frozen in bankruptcy court.
The letter further accused Bregal Partners of stripping its assets and scuttling the profits to avoid repaying its creditors. In November of 2022, about one year before declaring bankruptcy, the company sold its waterfront processing plant for more than $20 million and began selling its fleet of 15 scallop vessels and permits for an estimated $100 million.
The estimated $120 million from the sale of those assets did not seem to be listed in Blue Harvest’s bankruptcy filings, which valued its assets at $40 million while estimating its liabilities at $233 million.
Blue Harvest at the time of declaring bankruptcy sent a notice to more than 1,000 creditors — most of which were small businesses and independent contractors in the New Bedford area — claiming that it does not have sufficient funds to settle its debts and that “creditors cannot demand repayment.”
Sens. Warren and Markey and U.S. Rep. Keating cast doubt on the claim that it couldn’t repay creditors. They wrote that it is “inconsistent with the fact that Bregal Partners netted an estimated $100 million for itself by selling off assets in the two years prior to declaring bankruptcy.”
The letter made clear that stripping assets to defraud creditors may result in a court order clawing back the profits from selling those assets and redistributing the funds to creditors. The letter demanded Yoon provide details on the transfer of assets between Blue Harvest and Bregal Partners in the two years prior to the bankruptcy filing.
Blue Harvest’s default spelled a serious financial blow to many small businesses in the New Bedford area, each of which were owed between $10,000 and $50,000 in outstanding payments from Blue Harvest Fisheries at the time of its bankruptcy. Bregal Partners, which is part of a fund with over $18 billion under management, is ultimately owned by the billionaire industrialist Brenninkmeijer family, one of the wealthiest families in Europe.
“Rather than using the money to settle the debts owed to the small businesses of New Bedford, Bregal Partners shielded these assets from Blue Harvest’s bankruptcy filing in Delaware and pocketed the profits for itself,” Warren, Markey and Keating wrote.
Yoon could not be reached for comment on Tuesday.
In November of 2023, Blue Harvest’s remaining vessels and permits were liquidated in a bankruptcy auction. The entire portfolio was bought for $12 million by Cassie Canastra, director of the Buyers and Sellers Exchange, which is New Bedford’s public seafood auction, and Charles “Butch” Payne, under the corporation “C & P Trawlers.”
C & P Trawlers is the new largest permit holder in the New England groundfish industry. While retaining the permits, the company recently began decommissioning some of the vessels formerly owned by Blue Harvest. Last week, a welding accident caused one of those vessels to catch on fire and burn on the Fairhaven side of the port.
Correction: This story was amended Feb. 15, 2024, to correct the name of the Bregal Partners managing partner who was sent a letter from three members of Congress. The letter was addressed to Charles Yoon, not Gene Yoon.
Email Will Sennott at wsennott@newbedfordlight.org
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Simple, they are a “white collar” version of Carlos Raphael except, business is business!