Aleut looks to join Steller sea lion fight

The Aleut Corp. and its subsidiary, Aleut Enterprise LLC, are seeking to intervene in the Steller sea lion lawsuit.

Aleut Enterprise owns the seafood processing plant and runs the fuel terminal on Adak Island.

The state and numerous fishing industry players are challenging the federal government's closure of some fishing grounds in the Aleutian chain to protect the endangered sea lions.

Aleut, the Native regional corporation for the Aleutians, and Aleut Enterprise want to intervene in the suit as a plaintiff.

Rudy Tsukada, president of Aleut Enterprise, says in this affidavit the government's fishing restrictions likely will cut Adak marine fuel sales by half, cause fuel prices to spike by nearly 90 percent, cost five employees their jobs, decimate Adak tax revenues, and result in sundry other bad things.

About that motion for contempt

You might recall our posts on Aleut Enterprise asking a federal judge to hold its former tenant, Adak Seafood, in contempt for a purported failure to pay more than $215,000 in rent under a court-ordered lease agreement.

On Thursday, Judge Ralph Beistline denied Aleut's motion.

'Frankly somewhat appalling'

We told you last month about Aleut Enterprise asking a judge to hold its former tenant, Adak Seafood, in contempt for failure to pay $215,739.73 in rent.

As you might imagine, Adak Seafood has quite a different view of the situation, arguing the most it might owe in rent is $33,000.

The company's lawyer says the contempt request is "frankly somewhat appalling" given Adak Seafood's cooperation in relinquishing control of the Adak Island fish plant.

Read the company's full argument here.

You might also be interested in this declaration from Adak Seafood manager Asbjorn Drevik.

Contempt at Adak?

Deckboss loyalists know this blog has followed closely the legal strife surrounding the processing plant way out there on blustery Adak Island.

I simply don't have the energy tonight to recap the saga. You are welcome to search the archives for past posts.

But here's something new for you Adak aficionados: a motion in which landlord Aleut Enterprise asks that its most recent tenant, Adak Seafood, be held in contempt of court for failure to pay $215,739.73 in overdue rent!

Adak outlook changes completely

When last we visited the situation with the Adak Island processing plant, landlord Aleut Enterprise and tenant Adak Seafood reported they were trying to work out a settlement of their lease dispute.

Now it appears this has fallen apart. What's more, the Norwegian principal behind Adak Seafood apparently won't be operating the plant during the upcoming cod season.

How does Deckboss know this?

The details are in two very interesting documents filed yesterday in U.S. District Court in Anchorage, where the landlord-tenant fight is playing out.

The first document is this status report to the court. Interestingly, Aleut Enterprise filed this jointly with Independence Bank, which has millions of dollars in outstanding loans at stake and had been an Adak Seafood supporter.

The second document is an e-mail from Asbjorn Drevik of Norway informing Aleut Enterprise that he has been unable to raise the money to operate at Adak.

Well now.

The big questions at this point would seem to be: Who will run the Adak fish plant? And can it be readied in time for the fishing season?

A truce at Adak

The dispute between Adak Seafood LLC and its reluctant landlord, Aleut Enterprise LLC, appears to be sailing toward resolution.

Lawyers on Monday filed this notice in federal court in Anchorage saying the parties "have reached an agreement in principle to settle" the case.

You'll recall that Aleut went to court back in January to evict Adak Seafood over a lease dispute.

Presumably, the settlement will allow Adak Seafood to stay in the Adak Island fish plant and operate during the upcoming cod season.

The parties pledge to file a progress report within three weeks on their negotiations to finalize the deal.

Judge to Adak Seafood: You gotta pay rent

Loyal Deckboss readers know we've followed fairly closely the feisty lease dispute between Adak Seafood and its landlord, Aleut Enterprise.

To review, Aleut is suing in federal court to evict the processor from the fish plant on distant Adak Island. Aleut has its reasons, the nature of which you may glean from a search of past Adak posts.

Anyway, the two sides have been wrangling in court recently over the terms of an interim arrangement allowing Adak Seafood to stay in the plant while the litigation runs its course.

We now have those terms, as spelled out in this 13-page order from U.S. District Judge Ralph Beistline of Anchorage. The order establishes "conditions of occupancy."

Chiefly, the judge said Adak Seafood will actually have to pay rent, something it sought to avoid. And it must settle up any rent past due.

Further, the judge refused to order Aleut's subsidiary, Adak Petroleum, to sell diesel to the processor, which contends lack of fuel is strangling the business.

So there we have it.

Now let's see whether Adak's only fish plant operates during the mainstay winter cod season.

Adak conflict widens

Regular visitors to Deckboss know we've expended a fair amount of energy covering the legal battles surrounding the cod plant on faraway Adak Island.

Now comes yet another twist.

It seems the city of Adak feels the owner of the plant property, Aleut Enterprise, should pony up the unpaid utility bills left behind by its bankrupt former tenant, Adak Fisheries.

The city has sued Aleut in state Superior Court seeking $428,728.55 for electric, water, sewer and garbage services rendered.

Of this sum, $300,890.43 is for utility services to the processing plant, with $127,838.12 for services to 38 housing units that Aleut also leased to Adak Fisheries.

In an answer to the lawsuit, a lawyer for Aleut "denies the City's right to recover any of the requested relief through its claims."

Aleut argues the city is barred from collecting due to its "own negligence," and further cites the "doctrine of unclean hands" and sundry other defenses.

Of course, Aleut is battling in a separate case to evict the plant's successor occupant, Adak Seafood.

And an East Coast bank with millions of dollars in loans at stake also is involved in this fine kettle of fish.

More from Adak

Followers of the Adak conflict will recall how, in February, a federal judge rejected Aleut Enterprise's effort to evict Adak Seafood from the island's only processing plant.

That was a big victory for the tenant.

Now, here's news of a significant victory for the landlord.

The Regulatory Commission of Alaska has issued a seven-page order dismissing Adak Seafood's attempt to force Aleut's subsidiary, Adak Petroleum, to sell fuel to the processor.

Adak Seafood wanted the RCA to regulate the fuel business, arguing it is a "public utility" as the only fuel supplier on the island.

The RCA disagreed.

An Adak update

This press release arrived rather out of the blue yesterday regarding the lease dispute over the fish plant out on Adak Island.

A victory for Adak Seafood

A federal judge has rejected Aleut Enterprise's effort to evict Adak Seafood from the processing plant on Adak Island.

In this 11-page ruling issued Thursday, U.S. District Judge John Sedwick of Anchorage held that disputes involving landlord, tenant and a bank with millions of dollars in loans tied up in the plant are too complex for a quick eviction.

The judge further held that because Adak Seafood might hold some equity in the plant because of past improvements, this also precludes eviction.

So, it appears if Aleut Enterprise truly wants to boot Adak Seafood out of the building, it'll have to prevail in a longer legal proceeding.

Brewster Jamieson, attorney for Adak Seafood, told Deckboss in an e-mail today:

"Adak Seafood is very pleased that Judge Sedwick was able, in very short order, to grasp the facts and legal theories and to disregard Aleut's latest attempt to destroy the economy of Adak. Adak Seafood now intends to get on with its business, and we hope that Aleut Enterprise will stop their illegal campaign of intentionally interfering with Adak Seafood."

Adak fight boils over into new arena

Deckboss visitors know we've been keeping pretty close tabs on the standoff between Adak Seafood and its reluctant landlord, Aleut Enterprise.

Thus far the dispute has been waged vigorously in the bankruptcy court, the state courts and U.S. District Court.

Now Adak Seafood is taking the fight to a new arena, filing this
formal complaint today with the Regulatory Commission of Alaska.

A lawyer for Adak Seafood, which is trying to re-establish fish and crab processing in Adak Island's lone packing house, accuses Adak Petroleum of abusing its monopoly by refusing to sell diesel fuel to the plant.

Adak Petroleum, the island's only fuel supplier, is an Aleut Enterprise subsidiary.

Without the fuel to run a backup generator, tons of seafood could rot and go to waste in the event of an electrical power outage, Adak Seafood's complaint says.

Indeed, it appears this is the landlord's intent — a catastrophic loss "to kill" Adak Seafood, contends company lawyer Brewster Jamieson.

He urges the RCA, which regulates utilities, to extend its authority over Adak Petroleum, which currently "operates illegally, far from the watchful eye of any regulatory body."

Jamieson says Adak Petroleum charges exorbitant prices to "gouge" its customers, and is putting the island's environment at risk as evidenced by a recent spill.

Well, Deckboss will be sure to watch for the other side of the story, which he trusts will be filed in short order with the RCA.

Lawsuits a'flyin'

You'll recall Deckboss telling you about a hearing set for Friday in state Superior Court in the case of Aleut Enterprise suing to evict Adak Seafood from the fish processing plant on Adak Island.

Well, Deckboss trudged all the way down to the dang courthouse only to find the hearing had been called off.

It seems the matter has been transferred to federal court.

And, wouldn't you know, Adak Seafood has brought a lawsuit of its own against Aleut Enterprise alleging breach of contract and a bunch of other bad stuff.

By the way, just to remove any mystery, I saw a recent court document in which Kjetil Solberg, who founded the fish plant back in 1998, identifies himself as "plant and operations manager for Adak Seafood" and a resident of the island.

Get out!

I see now that Aleut Enterprise, the landlord out on Adak Island, has sued in state Superior Court to evict Adak Seafood, nascent operator of the island's lone fish processing plant.

A hearing on the matter is scheduled for 2 p.m. Friday in Anchorage.

Deckboss, of course, has been following the Adak conflict for quite some time, most recently here.

Motion denied

Earlier this month, Deckboss told you how the landlord out on Adak had told the new occupant of the island's lone fish plant to get out.

Or be thrown out.

Well, the latest twist in the drama is that Adak Seafood, which in November bought the former Adak Fisheries operation out of bankruptcy, asked for a temporary restraining order to prevent landlord Aleut Enterprise from "hindering" the plant.

Lawyers for Adak Seafood said the company is trying to start up the processing plant for this fishing season, but Aleut has refused to provide electricity or fuel to the plant, or provide access to the pier.

"Such actions are currently causing Adak Seafood significant damage, and if not immediately enjoined, will cause damage to all fishermen seeking to offload without traveling back to Dutch Harbor or dealing with Trident," says the motion for the restraining order.

Trident Seafoods Corp., an unsuccessful bidder for the Adak plant, is expected to send a processing ship to the Adak region.

Aleut Enterprise President Rudy Tsukada, in a written declaration filed with the court, said his company has "developed a lack of trust for the present management of Adak Seafood."

The management "is essentially the same as the previous management for Adak Fisheries," which ran up an unpaid fuel bill of about $700,000, Tsukada said.

So yes, he said, Aleut Enterprise's fuel subsidiary, Adak Petroleum, did cut off fuel sales after Dec. 31, which is when Aleut contends the lease expired on the plant property.

As for electricity, well, TDX sells power on Adak, not Aleut Enterprise, Tsukada noted.

Further, Tsukada said that while he doesn't believe Adak Seafood has access rights to the dock under the "expired" lease, Aleut Enterprise "has not locked it out."

OK.

So, yesterday in Anchorage, a hearing was held on Adak Seafood's motion for the restraining order against its reluctant landlord.

Motion denied, said U.S. Bankruptcy Judge Donald MacDonald.

Not sure where this thing goes from here, folks. Could get ugly.

Trident reveals Adak interest

Trident Seafoods Corp. is offering $2 million in cash for the assets of Adak Fisheries.

Seattle-based Trident, in a filing yesterday in U.S. Bankruptcy Court in Anchorage, said it would like to reopen the plant on far-flung Adak Island in early 2010.

The plant is known mainly as a cod processor, but Trident indicates it might process pollock there, too.

As we've previously noted here on Deckboss, however, Trident is not alone in pursuing the plant.

An outfit called Adak Seafood purportedly is offering $488,000 in cash plus assumption of $6.7 million in bank debt.

In papers filed this week in the bankruptcy court, Aleut Enterprise, landlord for Adak Fisheries, opposes the sale to Adak Seafood in part because the processor's former owner, Kjetil Solberg, appears to be involved with the prospective buyer.

Aleut Enterprise said it "does not believe that Mr. Solberg or any company in which he is involved can provide adequate assurance of future performance, based on past performance issues."

The whole affair is set for a big hearing in the Anchorage bankruptcy court starting at 9 a.m. Monday.

Deckboss just might amble down there and check it out.