Tuesday, November 8, 2011
MONMOUTH -- Olsen Agricultural Enterprises will sell nearly 800 acres of property in the Willamette Valley.
The firm will also divide into two entities that will separately run the farm and vineyard operations, said Robin Olsen, a member of the family-run company's board of directors.
The moves are part of a restructure process for the firm, which filed for Chapter 11 bankruptcy in June in order to restructuring its debts and find credit needed to stay afloat.
"We submitted our plan to federal court and our creditors for their review on Sept. 29," Olsen said. "We believe it will give us more flexibility and gives us a better ability to get our creditors paid off."
Olsen Agricultural grows grass, grains, nursery stock and produce on roughly 7,300 acres in Polk, Benton and Linn counties.
Its subsidiary, Olsen Family Vineyards, sits on 500 acres in the Suver area and has produced pinot noir and pinot gris wines under its Viridian label since 2004.
The firm will put the vineyard assets into a separate company, with the working name VineyardCo, to work on ventures with outside investors.
The only Polk County property divested is 62.5 acres just north of Independence, to be used as a city park and recreational complex.
The city recently purchased the site for $875,000. Olsen Agricultural will also sell 780 acres of farmland in Linn County and investment real estate in Hawaii, Olsen said.
The company has assets valued at $50 million -- fair market value -- and liabilities of approximately $37 million.
Olsen Agricultural Co., a precursor to the existing business, suffered a loss of almost $6 million in 2010, according to court documents.
Catalysts for the bankruptcy filing include the downturn in the grass seed market because of the sputtering housing market and a default on a loan.
Olsen Agricultural reached an agreement with Bacchus Capital Management in June for $3 million in interim financing for the vineyard business.
The vineyard is currently in the midst of harvesting grapes and doing fall fertilizing and planting on its remaining properties, Olsen said.
The reorganization "has been stressful on everybody," he said.
Still, the company's plan is to emerge from bankruptcy by the first quarter of 2012.
"The future looks positive," Olsen added. "The grass seed markets and prices are rebounding and we think there will be good days ahead."