Judge OKs $49M sale of NORPAC’s Oregon facilities

Special Reports

The sale encompasses the Brooks, Salem and Stayton facilities

PORTLAND, Ore. (KOIN) — A judge approved the sale of the bankrupt farmers’ cooperative NORPAC’s Oregon facilities on Tuesday in a downtown Portland courtroom.

Lineage Logistics, a Michigan-based cold storage company, agreed to pay $49 million for the Brooks, Salem and Stayton facilities.

More than 1,000 people have been laid off at those three plants.

A lawyer for VEGCO (Oregon Potato Company’s newly-formed subsidiary) also revealed that the company does not plan to operate the Stayton facility or the Salem plant, with the exception of “a short transition period.” VEGCO only intends to operate the Brooks facility.

Early on during Tuesday’s hearing, there was a dispute between the debtor’s attorney and an attorney for several unions representing former employees. The judge considered delaying the sale hearing to align with the timeline for figuring out what will happen to former collective bargaining agreements, however the parties in court all expressed a desire to wrap up the sale. The union issue will be resolved at a later date.

Farmers have also been watching the proceedings closely, since NORPAC was made up of more than 200 growers in the Willamette Valley.

During NORPAC’s last bankruptcy court hearing, held Dec. 11, 2019, the issue of farmers not receiving payment for their crops came up. According to attorney Rebecca Russell, who represents some of the growers, NORPAC promised farmers payment, and her clients delivered based on those promises. At the December hearing, NORPAC attorney Albert Kennedy told KOIN 6 that most growers had been paid their harvest and hauling advance to cover the costs they incurred while delivering crops. Normally, member growers also get profits after the delivery of crops, but it seems unlikely that they will get any additional payments this year.

“It seems like NORPAC’s promises should be honored,” Russell told KOIN 6 by phone Tuesday morning.

The issue of farmer payments was not raised during the latest hearing.

Attorneys for Oregon Potato Company/VEGCO declined to answer questions following Tuesday’s hearing.

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