MWA: Murray Wise Associates

Eclipse Berry Farms, LLC

Eclipse Berry Farms, LLC and its subsidiaries Harvest Moon Strawberry Farms, LLC and Rosalyn Farms, LLC (collectively “EBF”) was one of the largest fresh strawberry grower, processor, marketer, and shippers in the United States. At its peak, EBF leased and farmed over 2,500 acres of land in Oxnard, Salinas and Santa Maria, California and employed over 3,000 employees. The Company generated over $230,000,000 million in revenues from these growing operations alongside its Mexico import programs and berry processing operations.

Following the death of the Company’s CEO and primary equity holder in early 2017, Murray Wise Capital (MWC) was engaged by the Company to evaluate its strategic options. Commencing in mid-May, MWC embarked on a marketing campaign to over 250 potential purchases of EBF’s assets, including many of the world’s leading financial and strategic investors of fresh produce operations. By mid-July, MWC received seven non-binding indications of interest for the Company’s assets with legitimate range of value between $45 and $60 million.

Unfortunately, the strawberry industry as a whole, as well as EBF, experienced significant financial difficulties in the first half of 2017. Poor market conditions resulting from overproduction of berries from both domestic and foreign growers and lower quality crops due to La Nina conditions in California caused EBF to post a significant loss in the first half of 2017. At this same time, EBF’s senior lender informed the Company that they would not renew its long standing lines of credit that were essential to continue the Company’s operations, including planting its 2018 crop.

As a result of its loss of financing and poor financial results, the indications of interest for the purchase of the Company’s assets were no longer feasible as submitted and MWC advised the Company to consider other alternatives, including an orderly wind-down and liquidation of the business. Upon MWC’s recommendations, EBF appointed a third party Chief Restructuring Officer (“CRO”) and began the process of implementing procedures to maximize the recovery of asset values for all legally interested parties. The CRO, Company management team and MWC , immediately took action to complete and wind down the 2017 crop harvest, find transaction partners to assume ongoing leases and reimburse EBF for 2018 crop expenses incurred, assume other 2018 crop liabilities and to sell off or otherwise liquidate any other assets available including a live auction for the farming and other miscellaneous equipment and assets. Central to this strategy is a pending transaction with Superior Fruit LLC that will result in the recovery of over $10 million in value to the estate along with the assumption of another $13 million plus in future liabilities. Simultaneously, the CRO and EBF with MWC’s assistance began the process of reconciling, negotiating and addressing creditor claims.

In order to complete the wind-down and liquidation process and to orderly address the creditor claims, the company filed for Chapter 11 bankruptcy protection in early 2018. MWC is continuing to serve as financial advisor to EBF during this process and is responsible for assisting in the completion of the transaction with Superior Fruit and handling many of the financial reporting and administration duties required to file and implement a final Chapter 11 liquidating plan.

Read Article “Strawberry Fields for Sale”, originally published in The Bankruptcy Strategist, Dec 2018

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