Harvester boosts broccoli

Ron Pearmine, of Pearmine Farms, tries out his mechanical broccoli harvester at Obersinner Farms near Silverton, Ore., filling large crates with broccoli bound for NORPAC Foods in this Capital Press file photo.

The vast majority of farmers owed money for 2019 crops by the former NORPAC cooperative have agreed to a settlement under which they’d collectively be paid $4.5 million.

According to a committee representing NORPAC growers, 96 of roughly 100 affected farmers representing 99% of the deal’s economic value have signed the agreement.

For the settlement to proceed, growers representing 85% of its economic value had to agree to it, so the deal must now be approved by a bankruptcy judge to become final.

Earlier this year, the bankrupt cooperative filed a lawsuit against farmers who were seeking payment for crops delivered last year.

The defunct food processor, now called North Pacific Canners & Packers after selling its name and intellectual property, argued that its owners cannot hold valid agricultural liens against their own cooperative.

Creditors won’t be fully repaid for all their loans to NORPAC, so farmer-members are not entitled to any compensation, the cooperative claimed.

Farmers countersued the company, arguing it failed to act as a cooperative after filing for bankruptcy last year. They alleged that NORPAC would have become insolvent without those 2019 crop deliveries.

However, growers also faced the possibility of having to return money they were paid for past crops after unsecured creditors threatened a lawsuit to “claw back” such payments as allegedly being improper.

Under the terms of the settlement, unsecured creditors would drop such claims against farmers who sign the agreement and all other litigation would also be terminated.

The $4.5 million that would be paid out to farmers under the agreement amounts to less than 28% of what they’ve claimed to be owed.

The amounts paid to farmers under the deal would range from about $1,400 to $300,000, based proportionally on what they’re allegedly owed by NORPAC.

Creditors who’s loans were secured with collateral have been fully repaid after NORPAC sold off its processing facilities and other assets.

Under a proposed bankruptcy plan, unsecured creditors would be repaid for about 25% to 50% of what they’re owed.

I've been working at Capital Press since 2006 and I primarily cover legislative, regulatory and legal issues.

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