New Bedford fishing giant Blue Harvest Fisheries’ last assets could be sold at a bankruptcy auction as early as Wednesday, court filings show.
The sale could have major consequences for New Bedford’s economy.
Mayor Jon Mitchell and the New Bedford Port Authority have urged the bankruptcy trustee to ensure both the boats and permits remain in New Bedford, the nation’s top-earning commercial fishing port. Some fisherman and advocacy groups say regulators should seize the moment to break up the permits and enact stricter antitrust rules to limit future consolidation of the fishing business.
The final sale hearing, currently scheduled for Nov. 8, would be the last move in the liquidation process that began just two months ago, when Blue Harvest filed for Chapter 7 bankruptcy.
The assets up for auction include eight commercial fishing vessels and 48 state and federal fishing permits, representing about 13% of all quota in the New England groundfish industry. Blue Harvest is the region’s single-largest groundfish permit holder.
Decisions about the fleet’s sale will be up to Jeoffrey Burtch, the trustee appointed to the Blue Harvest bankruptcy in U.S. federal court in Delaware. “The sole focus of the Trustee is to maximize the value of the estate for the benefit of the creditors,” wrote Blue Harvest president Chip Wilson in an email to The Light.
Filings show the company has liabilities of more than $200 million and assets of less than $40 million. However, in November 2022, Blue Harvest finished selling off its scallop fleet for an estimated $100 million. The cash does not appear in the company’s listed assets, leading some to accuse the company and its private equity owners of asset stripping.
The bid deadline was Nov. 1, though none of the bids are yet public. The Nov. 8 sale hearing could be postponed if there are fewer than two bidders, according to the court filings. The trustee’s office declined to comment.
“I believe, but I cannot say with any certainty, that there will be some bidders for the whole package as well as some who are only interested in specific portions,” Wilson wrote. “If that occurs, it will take some time to sort all the bids out and determine what the highest value path may be.”
Much of Blue Harvest’s groundfish fleet was acquired from Carlos Rafael, the New Bedford seafood magnate who was imprisoned for fraud and forced to sell his fleet. The city then lobbied for the vessels and permits to remain in New Bedford. Blue Harvest bought the Rafael fleet in 2020 and has kept it in New Bedford since then. City officials say losing the permits could be a blow to the port economy.
“It is important that the bankruptcy court ensure that the company’s boats and permits remain in the hands of New Bedford-based businesses that will actively use them,” Mayor Mitchell wrote in a statement to The Light. Mitchell wrote that he’s asked the trustee to consider “the strong ties of the vessels and permits to the Port of New Bedford and the potential harm to small businesses here if they are sold to others.”
Some fishermen and fishing advocacy groups argue for breaking up Blue Harvest’s fleet. They say the current regulatory model has enabled massive consolidation in the fishing industry and allowed private equity, like the firm that ultimately owned Blue Harvest Fisheries, to box out owner-operator fishermen.
Antitrust rules in the fishing industry prohibit one company from owning more than 15.5% of the groundfish quota. That limit is among the most lax of all the nation’s fisheries, and in the past, regulators have expressed interest in a stricter limit. But they have also balked at introducing rules that would strip a company of its permits. So, with the Blue Harvest permits frozen in court, fishing groups say this is the moment for regulators to act.
“Get these safeguards in place. Build a system that promotes independent, owner-operator fishermen and discourages private equity from controlling the quota,” said Brett Tolley, who heads the North American Marine Alliance, a group that advocates for independent fishermen and against the privatization of the fisheries.
Blue Harvest is owned 89.5% by Bregal Partners, a private equity firm owned entirely by the Brenninkmeijer family, who are Dutch billionaire industrialists.
Owned by a billionaire Dutch family, Blue Harvest Fisheries has emerged as a dominant force in the lucrative fishing port of New Bedford. Its business model: benefit from lax antitrust rules and pass costs on to local fishermen.
“Another billionaire private equity firm controlling these permits is not good for the city of New Bedford. It is not good for the marine ecosystem. And it further undermines the state’s food system goals,” Tolley said. “The location of the permits should come secondary to who owns the permits.”
Canadian seafood giant Cooke has expressed interest in acquiring the fleet, industry sources said. The company has over $1.8 billion in revenue and is owned by the Canadian Cooke family. It was one of a few companies that attempted to buy out Blue Harvest in May 2023, though talks broke down in advance of the bankruptcy. Cooke already has a processing plant and a fleet of scallop boats in New Bedford.
Eric Hansen, the New Bedford representative to the New England Fishery Management Council, said he sees both sides, though he added the council has not officially weighed in on the matter.
“I’d like to see them [the boats and permits] stay in my city. It supports the infrastructure and other businesses,” he said. “But it might also be a good idea to put some other constraints on large fleet ownership.”
The sale hearing comes after the trustee, Burtch, asked the judge to expedite the process in order to ensure the company does not rack up more costs, like winterizing its vessels. Burtch has also voided the ‘Right of First Refusal’ agreement in Blue Harvest’s fishing sectors, a rule that was implemented to discourage consolidation. A fishing sector is a group of fishing permit holders who pool and manage their permits for leasing.
“The trustee has decided to void the sector’s Right of First Refusal provision on the sale of permits,” wrote Hank Soule, the sector manager for Blue Harvest, in an email to other sector members. “That means they will sell those assets, but sector members will not be provided opportunity to match the deal(s).”
Some fishermen in the sector say it is hypocritical not to apply the rule to Blue Harvest.
“They don’t have to play by the same rules as everyone else,” said Tim Rider, an owner-operator fisherman based out of Portsmouth, New Hampshire, and a member of the same sector in which Blue Harvest held its quota. “They never have.”
Email fishing industry reporter Will Sennott at firstname.lastname@example.org.