Monday, January 4, 2010

The battle for Adak continues

When last we visited the subject of the Adak fish plant, a U.S. Bankruptcy Court judge in Anchorage had just approved a sale of the operation to an outfit called Adak Seafood.

So, end of story, right? Adak Seafood starts processing lots of fine Aleutian Islands fish and crab and that's that.

Well, hold onto your codfish.

The landlord out on Adak Island, Aleut Enterprise, last week hit Adak Seafood with a "notice to quit," which I've posted here.

The notice advised Adak Seafood it had no right to occupy the property and further, the existing lease would expire at the end of December. The company was told to clear out right away or face "a civil action to remove you from the premises."

Aleut Enterprise President Rudy Tsukada signed the notice.

That Aleut would present the notice is no surprise considering the lawsuit that's been raging alongside the bankruptcy case that led to the processor's sale.

The side suit, known in bankruptcy parlance as an adversary proceeding, was brought by Independence Bank of Rhode Island, which is trying to salvage nearly $7 million in loans it made to what heretofore was known as the Adak Fisheries plant and its founder and former owner, Kjetil Solberg.

Solberg, as we've reported previously here on Deckboss, is involved with the new owner, Adak Seafood. We also reported there's bad blood between Aleut and Solberg.

Anyway, Independence is in Adak Seafood's corner, arguing the lease actually should still be in force. Not insignificantly to Independence, Adak Seafood agreed to assume the outstanding loans as part of its purchase.

Lawyers for the bank further allege the existence of a "nexus" between Aleut, John Young and Trident Seafoods Corp.

Trident, you'll recall, made an unsuccessful bid for the Adak plant, not agreeing to assume the loans. As for Young, he's a Seattle attorney who took ownership of Adak Fisheries last summer and signed it into Chapter 11 bankruptcy on Sept. 11.

The bank's lawyers contend Young, Aleut and others "engaged in a concerted scheme" to either terminate the lease or let it expire rather than exercise an option to renew it.

Young argues Independence Bank lacks sufficient facts to back up the notion of any scheme.

Yes, dear readers, the whole affair seems rather complex, doesn't it? And believe me, I'm leaving out many details for lack of post-holiday energy.

Bottom line is the fate of the Adak plant is far from settled, with the scram notice coming just as cod season opens.

It gets worse.

Turns out our government, specifically the U.S. Department of Agriculture, guaranteed portions of those Independence Bank loans.


Philip Munger said...

Good report, Wes.

Anonymous said...

How does Wes even make a living? I mean deckboss is good and all, but how much can it pay? Just wondering.

Linduh said...

I don't care what Wes does to make a living. Keep up the good work!!
Quoting my sister from an email discussion we had on this topic yesterday: "I see what the Aleut's lawyers are saying, but to give the notice 1 day before they are told to be off that right? Not sure how that works. I thought landlords were required to give so much notice...yet, the company they were giving notice to didn't legally sign an agreement with the Aleuts to begin in a sense...aren't they trespassing...which leads to the civil matter."
Either way, this needs to get settled quickly. This can't be good for the City of Adak.

Anonymous said...

I wanna know how loy gets paid. If you can make a living by just running a blog like this I want in.

Anonymous said...

I went to court last year to get a forced eviction of a deadbeat tenant. Under Alaska law it is possible to have the troopers forcibly remove an occupant in as little as two weeks, depending on the speed of the court. If the lease actually terminated on Dec 31 and Aleut refuses to renew, they can toss the bums out. Anything that gets rid of Kjetil is good, I suppose...

Anonymous said...

Toss the bums out?!
The court papers show the new company just invested $2,000,000, and gave Aleut $150K in upfront rent, payment through June 2010!
Seems to me the only bums are Aleut.

Anonymous said...

It is beyond some folks here that this man is some kind of hero. When he doesn’t have the money to pay he uses his employees credit cards to pay and the never pays them back. The damage that has been done to the piers and to the building has yet to be repaired. And the damaged to the Admin building and the housing units is just wrong and may never be repaired. This man is putting up a front and taking us as Americans as fools and will screw us (Adak) as long as he can. The money leaves here and has never been invested into the community or city. His whole demeanor is that he is some kind of a god when he is on the Island. Look folks, he needs to go!!! A new more profitable company needs to come in and do the right thing for here.

Linduh said...

What has he done to the housing units? I'm curious. Do they have anything to do with the units that are currently for sale? Have any of them sold yet?


I don't believe psibjorg has anything to do with the housing, probably Aleut's department. The housing is still for sale. CHEAP! Likely a GOOD spot to run from the impending disaster. Good Harbor,... plenty of Fish,... Plenty of housing for families,...plenty of Black and Grey Cod. A Small, CLEAN Jigger could do quite Well there. Possibly a Small Boat Red King Crab opener coming... First come,... First served come GIVEAWAY(ifq) time,... unlike OUR Crab Jobs. WE just NEED TO remove the Norweigen plant, who collapses American Buisnesses on purpose, to avoid AMERICAN TAXES, and gain FOOD for the fatherland. WE MUST TAKE BACK WHAT RIGHTFULLY BELONGS TO US!!

Scott McMurren said...

We need you on the ground in Adak, Wesley. You can get out there with miles, cheap.

Anonymous said...

Kjietil deserves some kind of appreciation for the good he has brought to Adak .In time he will returnto be that successful person he is!