
Prima Wawona to shut its doors, liquidate assets
In a stunning admission in bankruptcy court in December, an attorney for Prima Wawona announced that the company was not able to receive a sufficient bid for its business through an auction process and would be liquidating its assets. In a companion move, several sources have reported that the company gave its nearly 6,000 employees 60-day termination notices, which is required by California law to continue with the closure of the operation.
In court, the Prima Wawona attorney said the lack of a qualifying offer “has forced us to conclude that the liquidation value of the company exceeds its going concern value, so we are going to do what we have to do, which is to liquidate the business. Now, by the way, when I say that, of course, that is ultimately the debtor’s decision and its ultimately what this court rules at the end of the day, but it does inform how we are prepared to finance the case moving forward.”
The Official Committee of Unsecured Creditors that was appointed in the case has reportedly filed an objection to the plan.
Last October, Prima Wawona announced that it was filing Chapter 11 bankruptcy in an effort to implement an ownership change. At the time, the company said the bankruptcy filing was expected to expedite the sale of the company to a qualified third party. The Chapter 11 petition asked the court to let it continue operating through its reorganization, including paying employees and suppliers. According to court documents, Prima Wawona had more than $300 million in sales revenue in 2022. The filing revealed that the company had about $679 million in debt on October of 2023. The company proposed a Nov. 17 deadline for bids on the business.
Reportedly, Prima Wawona received a bid for $275 million but did not move forward with it. A report put together by Pearson Realty, a San Jose real estate company that bills itself as experts in California agricultural properties, estimates the company has about 13,500 acres of land to liquidate, with a value of approximately $370 million.
That would represent a significant decline in company value since the organization was formed from a 2019 merger of Gerawan Farming Inc. and Wawona Packing Co. Prima Wawona is owned by the private equity firm Paine Schwartz Partners. The merger made it the largest California stone fruit grower-packer shipper by a wide margin. Insiders noted that at its height, Prima Wawona was valued at more than $1 billion.
The next hearing in bankruptcy court is set in early February with members of the debtor group expected to object to any plan that would effectively absolve Paine Schwartz for any liability in the company’s devaluation.
In a story in The Produce News in October on the bankruptcy filing, a longtime San Joaquin Valley grower anonymously expressed sadness at the demise of the Wawona and Gerawan operations in the hands of a private equity firm. “They were very good farmers,” he said of the Smithcamp and Gerawan farming families that ran those respective companies for many decades. “I don’t want to speculate what happened in this specific case, but you can’t take the soul out of an operation and expect it to thrive. An MBA can’t make the decisions that come with farming the same land for decades.”
Another valley grower who comments were published in The Produce News in late October was accurate in his forecast of the auction results. He said it is hard to imagine that a third party will come in and buy the assets for anything but a highly discounted price. He opined that it is more likely that the company would be sold in pieces.
The San Joaquin Valley-based, family-owned-and-operated Wawona Frozen Foods is not affiliated in any way with the fresh fruit company Prima Wawona.