A court-administered auction to sell a southeastern Tulare County pistachio plant owned by the Assemi family’s struggling Touchstone Pistachios ran into some last-minute drama.
The plant, located in Terra Bella and previously owned by ARO Pistachios, was subject of an auction led by Touchstone’s court-ordered receiver, David Stapleton, with California’s second-largest pistachio processor, Terra Bella-based Setton Pistachios, as a “stalking horse” bidder on the plant and a wide array of Assemi-owned equipment.
The big picture: The auction for the plant and equipment was scheduled for Thursday, April 17, with bids required to be submitted by 5 p.m. on Wednesday, April 15, per court records.
- Stapleton, in a court filing submitted Friday, announced he had cancelled the auction for the plant after deeming the stalking horse bid from Setton Pistachios to be the only bid from a qualified bidder.
Driving the controversy: Bidding over the Terra Bella pistachio plant went awry after a set of bidders materialized days before the auction date and, in court documents filed Monday, alleged that Stapleton deliberately ignored their joint and separate bids for the plant.
- Initially, Stapleton wrote in a declaration to Fresno’s Federal Court, he received a letter of intent on behalf of two sets of investors hoping to buy the plant jointly.
- One portion of the group was led by Adam Orandi, whose family owned ARO Pistachios and the Terra Bella plant prior to its sale to the Assemi family, and two Chicago-based investors.
- The other was led by Visalia farmer Bitta Toor of Toor Farming, LLC.
- The joint bid for Terra Bella plant was pegged at $50 million, with a non-refundable deposit of $5 million to be paid within 14 days of purchase approval.
- Unlike Setton’s stalking horse bid, which would close within 14 days of approval of the sale, the joint Orandi-Toor Group requested 150 calendar days to close the $50 million purchase, less its deposit.
- According to a declaration from Stapleton, Orandi and Toor separated one day later and submitted separate bids, with each insisting on holding the close of the transaction for 150 days. Stapleton deemed Orandi’s group as unqualified due to the inflexibility on closing.
- Stapleton further disqualified Toor’s group for failure to demonstrate sufficient evidence of financial ability to close, he wrote.
The other side: Stapleton submitted a proposed order to Fresno’s Federal Court to accept Setton Pistachios’ stalking horse bid of $25.25 million for purchase of Touchstone’s Terra Bella plant, set to close in 14 days.
Equipment sale: Setton Pistachio separately faced competition from California Pistachio Orchards, LLC, represented by George Holland III, at auction for a wide array of equipment held at Touchstone plants – both in and outside of Terra Bella.
- Ultimately, Setton managed to win the equipment auction with a bid of $6,507,500, representing an increase of $1,257,000 from its stalking horse bid for the lot of equipment.
- Per Stapleton’s declaration, California Pistachio Orchards will serve as the qualified back-up bidder with a bid of $3,949,700 for a portion of assets under the lot of equipment auctioned off.
