Farm seeks relief from $37.2M debt
Diversified operation farms 7,700 acres of grass seed, wine, other crops
By MATEUSZ PERKOWSKI
A diversified agricultural company that farms about 7,700 acres in Oregon's Willamette Valley has filed for bankruptcy, blaming the prolonged downturn in the grass seed industry.
Olsen Agricultural Enterprises, based in Monmouth, Ore., is seeking Chapter 11 bankruptcy protection, which will allow it to stay in business while working out a debt repayment plan.
"The 'Great Recession' of 2007 created a crisis of epic proportions in the homebuilding industry which, in turn, caused a significant and sustained decrease in the demand for grass seed," said James Olson, the company's marketing director, in a bankruptcy court document.
Last year, the company lost about $5.8 million with total revenues of about $6.4 million, according to the declaration. It has about $37.2 million in debt and has assets valued between $30 million and $50 million.
The bulk of the company's leased and owned acreage in Benton, Linn and Polk counties is devoted to grass seed and grains, but it also produces nursery stock, blueberries, hazelnuts, wine grapes, peppermint and squash.
Olsen Agricultural Enterprises resulted from a merger of several firms owned by the Olsen family that occurred on June 1, the same day the company filed for bankruptcy.
The company has been suffering operating losses since 2008, which caused the firm to default on a $15 million line of credit from Rabo Agrifinance that it had taken out to help fund its winery business.
Defaulting on real estate and operating loans restricted the company's cash flow, prompting it to default on trade debts, said David Foraker, an attorney representing Olsen Agricultural Enterprises in bankruptcy court.
The company's largest unsecured trade debt -- $680,000 -- is owed to the Oregon Vineyard Supply Co. of McMinnville, Ore. The farm supply company said it could not comment on the bankruptcy.
After Rabo Agrifinance declared the company was in default and sought to pursue foreclosure of its property, the firm decided to file for bankruptcy protection, Foraker said.
The goal of the bankruptcy is to restructure the company's debt and operations while keeping it in the ownership of the Olsen family, he said.
Since the bankruptcy filing, a judge has approved the company's request to use its cash flow to pay employees and otherwise keep the business operational.