PORTLAND, Ore. (KOIN) — A judge approved the sale of NORPAC’s Quincy, Washington plant Wednesday afternoon in bankruptcy court. The winning bid came from Oregon Potato Company and, according to attorneys, may save the jobs of some formerly-terminated employees here in the Willamette Valley.
The decision comes after a day-long bidding war that was still going on about 15 minutes after the parties were due back in court.
In the initial hearing Tuesday, NORPAC had competing offers from Oregon Potato and Simplot, a Boise-based agribusiness. After the hearing, NORPAC attorney Albert Kennedy said they would be conducting an auction and it would close that night. Instead, it continued through the morning and into the early afternoon.
When the hearing began Wednesday, Simplot had a higher bid by about $3 million. A lawyer for Oregon Potato Company said they were prepared to match the bid. After a short adjournment, Kennedy said Oregon Potato had upped its price to one that was equal or superior to Simplot’s. Kennedy said that they believed the proposal should be approved.
After years of financial troubles, NORPAC filed for Chapter 11 bankruptcy in August, and announced plans to sell most of its assets to Oregon Potato Company for $155.5 million. But the buyer pulled out at that time, complaining NORPAC hadn’t provided necessary documents to complete its due diligence on the transaction.
In November, Oregon Potato made its new offer to purchase just the Quincy plant and its related assets for a lower price. That would have left the Brooks, Salem and Stayton facilities unspoken for.
However, according to Kennedy, the company received a letter of intent in December from Lineage Logistics to purchase the Oregon facilities for $49 million. If that happens, Lineage Logistics plans to lease the Brooks and Salem plants to Oregon Potato, Kennedy said.
In Wednesday’s hearing, the judge asked whether that would mean the reemployment of some of the employees who were terminated. Oregon Potato Company’s lawyer said, “Yes.”
It’s not clear how soon that might happen, since Lineage has not officially purchased those facilities yet.
NORPAC and Oregon Potato agreed to a closing date of January 15 and a sale price of up to $107 million. If the deal falls through, Simplot will be considered a backup buyer.
During the hearing, about 137 people were listening via phone. One woman, who said she represented several NORPAC member growers, brought up an issue about growers being informed that they would probably not be receiving any further payments for crops. Since that issue did not directly impact the motion to sell the Quincy assets, no official action was taken.
After the hearing, KOIN 6 asked NORPAC’s lawyer about the claims.
Most growers have been paid “what is called in the industry the ‘harvest advance’ and the ‘hauling advance,’ which is the cost that they incur in delivering the crop,” Kennedy said. “Not necessarily the value of the crop, but the cost that they have incurred. They have been paid that. A few in November were not, but hopefully they will be paid.”
Member growers normally receive profits from the co-op. However, this year there may not be profits, Kennedy said. So it “remains to be determined” if farmers will get any further payments.