Sales pitch for creamery online; cooperative members under the gun to come up with financing

Committee of largest unsecured creditors selected; creditor meeting scheduled for early June in Eureka

Originally published in the "4-30-09" issue.

A virtual “data room” is complete for those interested in buying Humboldt Creamery.

Humboldt Creamery LLC CEO Len Mayer said by the end of this week a sales brochure should also be finished that will start to go out to prospective buyers.

“Those that have a legitimate interest can go to this online data room and, after entering a password, can find out how many employees we have, what they are paid, what kind of sales volumes we have,” explained Mayer, adding that under Chapter 11 bankruptcy, the required chain of events aremoving ahead at a fast pace.

Meanwhile, the 50 cooperative members gathered again on Tuesday morning at the fairgrounds to discuss progress on a financing package so that the co-op can make a bid to buy back the creamery.

“There are a lot of things to organize,” said Mayer, “from members finding a bank to finding investment groups.”

Mayer noted the possibility of the co-op receiving a state Community Development Block Grant and financing from an “anonymous group.” Mayer said it will be up to themembers to announce who the group is, if they are successful in reaching an agreement on financing.

Meanwhile, a seven member unsecured creditor committee has been formed and a first meeting has been held. Mayer said there are probably “less than 100” creditors the creamery owes money to, although all 2,950 vendors that the creamery has done business with were notified of the bankruptcy this week by mail.

The committee was selected from the top 20 unsecured creditors and includes Rumiano Cheese Company, California Dairies and Steve Wills Trucking. The committee and all other creditors will be notified of an early June meeting in Eureka.

“These guys will get together and work onbehalf of all unsecured creditors,” explained Mayer. “They will work through what is legal and a fair way for the debtor to divvy up the proceeds of what comes out of restructuring.”

Former CEO Rich Ghilarducci is on the top 20 list, with a claim of $369,000. Verification of exactly what Ghilarducci is owed was not available by press time, although Mayer told The Enterprise last week that it probably involved an investment Ghilarducci made in years past in the creamery. Mayer did confirm that Ghilarducci’s last paycheck was held back, per the advice of the creamery’s attorneys.

Meanwhile, Mayer said the creamery is meeting the first two weeks of a budget prepared for the bankruptcy court with an anticipated $2.5 million paid to dairyman over the past two weeks. Sales forecasts for $3.6 million by May 1 are also on track, he said.

“Customers are sticking with us,” noted Mayer.