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.

Possible buyer of Adak fish plant comes clearer

I've been able to peel away a bit of the mystery surrounding a potential buyer of the assets of Adak Fisheries, which has filed for bankruptcy.

The processor's main creditor, Independence Bank of Rhode Island, is asking the court to OK a sale to an outfit called Adak Seafood LLC.

As you might recall, Deckboss was unable to tell you very much about Adak Seafood a few days ago.

A friendly reader has since steered me to the following fine print in certain court documents:

Adak Seafood's address is care of a law firm in Providence, R.I.

The company's managing member is listed as Asbjorn Drevik.

Adak Fisheries, in its bankruptcy filing, listed Norwegian seafood company Drevik International AS as a top creditor with a "disputed" $3.8 million claim.

In checking Drevik International's Web site, I see an Asbjørn Drevik listed as a company contact.

The next hearing is scheduled for Oct. 7 in the bankruptcy court in Anchorage.

Trident empire expanding to Adak?

Deckboss probed a little deeper today into documents filed thus far in the Adak Fisheries bankruptcy case and came across an interesting e-mail from company lawyer Cabot Christianson.

The Sept. 12 message to lawyers for creditor Independence Bank says in part that Adak Fisheries "does not intend to operate the processing plant at Adak; instead, Debtor intends to negotiate a sale of the equipment at Adak to Trident Seafoods, or some other bidder, and then either convert to a Chapter 7 or file a liquidating plan of reorganization."

The e-mail adds: "Regardless of whether the sale is successful, there are insurance claims to collect and cod liver oil, and other inventory, to sell."

Certainly, it wouldn't be unheard of for Seattle-based seafood giant Trident Seafoods Corp. to go shopping in bankruptcy court. It did so this spring, acquiring Wrangell Seafoods.

Trident is now operating the Wrangell plant, but it might not have any interest in actually running a plant on faraway Adak Island, some 350 miles west of Dutch Harbor. Note that Christianson's e-mail says only that Adak Fisheries might sell equipment to Trident, not the whole operation.

Independence Bank, which says it has $6.7 million in outstanding loans to Adak Fisheries and a priority claim to the company's assets, casts doubt on "a purported offer to purchase" from Trident.

"No such offer has ever been provided to either the Court, or creditors or other interested parties," say papers Independence filed Friday in U.S. Bankruptcy Court in Anchorage.

The bank is asking the judge to approve a sale to a company identified as Adak Seafood LLC.

I was unable to discover just who is behind Adak Seafood. The state's corporation database lists no active company by that name, and I haven't seen any court documents revealing its owners or officers.

A fine little mystery!

Bankruptcy for Adak Fisheries

The end could be near for Adak Fisheries LLC, a little seafood processor with a hugely tumultuous history.

The company, which runs a plant for processing cod and other fish on distant Adak Island in the Aleutians, on Sept. 11 filed for Chapter 11 protection from creditors in U.S. Bankruptcy Court in Anchorage.

You'll recall we touched on the troubles of Adak Fisheries only recently with a post about the company's battle with the local electric power utility.

According to its bankruptcy petition, Adak Fisheries has assets of $10 million to $50 million, with liabilities estimated in the same range.

Some top creditors include Drevik International AS of Norway, $3.8 million; Aleut Enterprise LLC of Anchorage, $1.3 million; Muir Milach Management LLC of Mercer Island, Wash., $402,000; TDX Adak Generating LLC of Anchorage, $268,000; Trident Seafoods Corp. of Seattle, $255,000; and the IRS, $231,000.

At least one creditor is in no mood to allow Adak Fisheries to reorganize its business.

Independence Bank, which says it loaned Adak Fisheries and founder Kjetil Solberg $4.35 million in 2007, yesterday filed to convert the case from Chapter 11 to a Chapter 7 liquidation.

Independence says it "has a first position security interest in essentially all of Adak's assets."

I don't have time at the moment to recount the colorful history — the failed partnerships and political exploits — of Adak Fisheries and Mr. Solberg.

But I'll say this: Wonder what becomes of the fledgling town of Adak? The lone fish plant was a pillar of the economy out there and a major part of plans to turn the former military outpost into a viable civilian fishing town.