Setton Pistachios is on its way to expanding its operations in Terra Bella by acquiring the Touchstone Pistachio processing plant in a bankruptcy court auction, barring a last minute reversal from a federal judge.
Setton has a proposed order pending before the court that would confirm its purchase, despite two other bidders entering the field late last week. New documents filed Wednesday reveal the last-minute fracas of bid attempts included one assisted by Darius Assemi, whose family owns Touchstone, to facilitate a deal that would close at the end of 2025.
The backstory: U.S. Bank and Prudential sued the Assemi family for allegedly defaulting on over $705 million in loans for its farming operations.
- Fresno-based U.S. District Court Justice Kirk E. Sheriff appointed a receiver last year to manage more than 50,000 acres of distressed farmland, with an auction for the Terra Bella pistachio processing plant and Assemi-owned equipment scheduled for April 17.
Flashback: Last Friday, receiver David Stapleton cancelled the auction for the plant after determining that the stalking horse bid from Setton was the only one from a qualified bidder.
- Adam Orandi, whose family owned ARO Pistachios and the Terra Bella plant before selling it to the Assemis, joined together with Visalia farmer Bitta Toor of Toor Farming, LLC, on a joint venture to make a $50 million bid on the plant. They later separated and each made their own bids that both needed 150 days to close, while Setton only needed 14 days.
- Stapleton disqualified Orandi and Toor in part for being inflexible on their lengthy time needed to close the deal.
- Stapleton also submitted a proposed order to Sherriff for approval in accepting Setton’s $25.25 million bid for the Touchstone plant.
The big picture: On Wednesday, after bidders accused him of deliberately ignoring their bids, Stapleton filed a reply in support of the motion in federal court.
- Stapleton said in Wednesday’s filing that the path to maximize the value of the assets was to agree to the bid with Setton and had support from U.S. Bank – the primary stakeholder – for the deal.
- “Ultimately, neither of the two last minute proposed Bids complied with the Bid Requirements, or, in the Receiver’s judgement, were executable,” Stapleton wrote. “Proceeding with either of these Bids would have jeopardized the value and certainty offered by the Stalking Horse Bidder, imposed millions of dollars of additional carrying costs on the estate, and required the Receiver to take the risk that Bidders who had failed to provide proof of funds would at some point in the future, be able to close.”
- The last-minute bids would have only provided a minimal incremental value of $497,500, per Stapleton.
Assemi steps in: Stapleton also revealed in the reply that Assemi tried to facilitate a $70 million deal.
- Per the filing, Assemi called Stapleton on April 10, telling him that Nader Malakan, who is an associate of the Assemi family, would make a $70 million bid.
- Malakan had already been in touch with Stapleton over purchasing the Touchstone equipment but had never expressed any interest in purchasing the pistachio processing facility.
- Following the phone call, Stapleton received an email from Assemi that copied Malakan and indicated that Malakan was “looking at a substantially higher offer” with a “year end close.”
- Stapleton’s attorneys talked to Malakan on April 11 about a potential bid, and Orandi joined the call as well. Malakan and Orandi were preparing a joint bid but had not come to an agreement on a price or structure by that point. They also needed a significant amount of time to actually close the deal.
- “Mr. Malakan specifically explained that a year-end closing would allow him to complete the 2025 harvest and be better positioned financially,” Stapleton wrote.
- After the April 11 call was completed, Stapleton’s attorneys sent Malakan a list of requirements to place a bid. Malakan responded, “I believe the wire was already initiated,” and copied Orandi, Assemi and Toor. But Stapleton said in Wednesday’s filing that he never received a wire, food faith deposit, or bid from Malakan.
- Following that, Stapleton said that the joint venture by Orandi and Toor formed on April 14, before that eventually split apart as well.
