Warren, Markey, Keating Question Private Equity Firm Bregal Partners on Blue Harvest Bankruptcy and Impact on New Bedford Fishing Industry
Warren, Markey, Keating Question Private Equity Firm Bregal Partners on Blue Harvest Bankruptcy and Impact on New Bedford Fishing Industry
“After years of putting private equity profits ahead of workers and small businesses, Bregal Partners – which owned and stripped Blue Harvest of its assets – owes the community an explanation. Your actions have harmed New England’s fishing industry and left over 1,000 independent contractors, businesses, and other creditors saddled with debt.”
New Bedford, MA - United States Senators Elizabeth Warren (D-Mass.), Edward J. Markey (D-Mass.), and Rep. William R. Keating (D-Mass) sent a letter to Managing Partner of Bregal Partners Charles Yoon to seek information on the November 2023 sale of bankrupt Blue Harvest Fisheries and the failure to pay over $100 million in debts owed to more than 1,000 independent contractors, businesses, and other creditors.
“Bregal’s actions with respect to Blue Harvest have left local small businesses and workers holding the bag after your firm spent years price gouging, mistreating workers, saddling consumers with junk fees, and stripping assets,” the lawmakers wrote.
Blue Harvest Fisheries, the largest groundfish operation in New England, filed for Chapter 7 bankruptcy in September 2023. Blue Harvest’s majority equity holder was the Dutch-owned private equity firm, Bregal Partners, which owned 89.5 percent of the company. The September 2023 bankruptcy filing has been described by experts as “little more than a heist staged by … Bregal Partners…(which) netted a bundle of cash, estimated at about $100 million, by selling off its most valuable assets in the two years prior to declaring bankruptcy.”
In 2022, Bregal Partners and Blue Harvest reportedly began selling off Blue Harvest’s most valuable assets. By November 2022, Blue Harvest had sold its waterfront processing plant for more than $20 million and a fleet of scallop vessels and permits for an estimated net gain of $100 million. After “stripping the company of its assets” and laying off 17 employees, Blue Harvest quietly and abruptly announced its decision to shut down and filed for Chapter 7 bankruptcy in Delaware on September 8, 2023, hundreds of miles away from the New Bedford community.
Rather than using the money to settle the debts owed to the small businesses of New Bedford, the letter argues, Bregal Partners shielded these assets from Blue Harvest’s bankruptcy filing in Delaware and pocketed the profits for itself, as it has repeatedly done throughout its “eight-year roll up of the New Bedford fishing industry.” In addition, independent contractors have revealed that Blue Harvest failed to provide severance payments or any additional information about its closure. Blue Harvest appeared to contribute part of its remaining funds to hiring a private security team to guard its assets – fishing gear and machinery – to prevent companies with outstanding debts from reclaiming their gear or machinery before they auctioned them off. In November 2023, “the final chapter in the saga,” Blue Harvest’s vessels and permits were liquidated for $12 million.
The lawmakers are asking Bregal Partners to provide answers about the Blue Harvest bankruptcy and its impacts on the New Bedford community by February 26, 2024.
Senator Warren has called out private equity firms’ broken model and has been a leader in fundamentally reshaping private equity’s grip over the economy:
- In January 2024, at a hearing of the Senate Special Committee on Aging, U.S. Senator Elizabeth Warren called for a robust federal role in overseeing assisted living facilities and blasted private equity for declining quality of care.
- In May 2023, Senator Warren called out corporate owners of nursing homes, including private equity firms and Real Estate Investment Trusts (REITs), for their failures to protect patient safety and use of complex legal arrangements to avoid regulatory scrutiny.
- In May 2022, Senator Warren and lawmakers sent a letter to private equity giant KKR regarding the grossly substandard care and unsafe living conditions in group homes it owned for people with intellectual and developmental disabilities.
- In February 2022, Senator Warren called out private equity firms’ predatory practices of buying up distressed companies, stripping workers of benefits, fair pay, and safe working conditions, and reaping billions in profits.
- In October 2021, Senator Warren and lawmakers reintroduced the Stop Wall Street Looting Act, a comprehensive bill to fundamentally reform the private equity industry and level the playing field by forcing private investment firms to take responsibility for the outcomes of companies they take over, empowering workers, and protecting investors.
- In October 2021, chairing a hearing of the Senate Banking, Housing, and Urban Affairs Subcommittee on Economic Policy, Senator Warren spoke about the need to protect companies and communities from destructive private equity practices as the industry’s growth continues to explode.
- In August 2021, Senator Warren and lawmakers launched an investigation into private equity ownership of for-profit hospice companies and subsequent reductions in the quality of care.
- In November 2019, Senators Warren and Sherrod Brown (D-Ohio), and Representative Mark Pocan (D-Wisc.) wrote to four private equity firms that invested in companies providing nursing home care and other long-term care services, citing reports that show private equity investment has played a role in the declining quality of care in nursing homes and requesting information about each firms' management of this sector.
- In October 2019, Senator Warren and Representatives Pocan and Ocasio-Cortez wrote to five private equity firms that own companies providing support services to prisons highlighting how private equity firms deliver poor quality food and services at exorbitant prices, making huge profits off of incarcerated people, their families, and taxpayers.
- In October 2018, Senator Warren demanded answers from Vornado Realty Trust and five hedge funds on their role in the liquidation of Toys "R" Us, which resulted in 30,000 workers losing their jobs without severance pay-after it was revealed that the company's bankruptcy was the result of the leveraged buyout of the company in 2005 by two private equity firms.
- In April 2018, Senator Warren published an op-ed in which she spoke out against the House's attempts to include a provision in its bank deregulation bill that would benefit a handful of big private-equity firms while putting ordinary investors at greater risk.
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