Bankrupt peach giant Prima Wawona is being liquidated after not receiving a high enough value through the auction process.
Prima Wawona said in bankruptcy court last month that it has started the liquidation process and is looking to move forward expeditiously.
The backstory: Prima Wawona filed for Chapter 11 bankruptcy last October just four years after acquiring Gerawan Packing to become the nation’s largest peach farmer.
- The company had a $275 million credit bid last month but did not move forward with it.
- After announcing plans to liquidate, the Official Committee of Unsecured Creditors that was appointed in the case filed an objection to the plan, arguing in part that the liquidation would benefit company insiders.
The big picture: A lawyer for the Prima Wawona lenders told the bankruptcy court that the company went through an auction process but did not receive a bid that the company had targeted.
- That forced the lenders to conclude that the liquidation value of the company exceeds its going value, leading to the move to liquidate.
- Further, employees have been given 60-day notices of termination, per sources with knowledge at Prima Wawona.
Go deeper: According to a presentation put together by Pearson Realty on behalf of lender Wawona Farm Co. LLC, Prima Wawona has nearly 13,500 acres of land to liquidate.
- Pearson Realty set a total price of $370 million for the land, which is split up into seven groups located in parts of southeastern and west Fresno County.
- The largest piece of land, called Sanger River Bottom, consists of over 2,800 acres east of Sanger priced at $35,000 per acre to total $98.9 million.
- The third-largest land grouping, located around Dinuba and Orosi, consists of over 2,100 acres priced at $32,000 an acre to total $69.1 million.
- Over 2,300 acres located northwest of Raisin City is the company’s second-largest land grouping, but is priced at $15,000 per acre to total $35.1 million in value.
Statement from Wawona Frozen Foods: The San Joaquin Valley-based, family-owned and operated Wawona Frozen Foods is not affiliated in any way with the fresh fruit company, Prima Wawona. Wawona Frozen Foods is a third-generation company which just celebrated its 60th year in business and is among the largest frozen fruit companies in the nation.