UPDATED: Two years after a private equity firm acquired two iconic Twin Cities’ fresh produce operations, bankruptcy appears imminent as the bills go unpaid and lawsuits accumulate.
St. Paul, MN-based J&J Distributing BB #:100664 and New Brighton, MN-based H. Brooks Co. BB #:100563 announced a joint acquisition by New Harvest Foods, a private equity firm controlled by the Dragonfly Group, with affiliates led by Jayson Jaynes.
Ron Carkoski, former CEO of Four Seasons Produce, Ephrata, PA, was named CEO of the company at the time of the merger announcement, and left in June 2020 “after it became abundantly clear the new ownership group could not sufficiently capitalize the company,” Carkoski said in an email.
Jaynes took over the position after Carkoski’s departure.
But, according to court documents and an article in the Minneapolis Star Tribune, the merger was never completed, and the private equity firm “left the companies to rot.”
According to court documents, J&J sold for $9 million and H. Brooks for $4.9 million, but $8.4 million of J&J’s sale price and $4.9 million of H. Brooks’ sale price is still outstanding, and the companies never operated under the New Harvest name.
Attorneys for New Harvest foods have alleged failed disclosures in the merger, according to court documents.
On the business side, both J&J Distributing and H. Brooks have numerous outstanding bills, PACA Actions and, on April 30, Wenatchee, WA-based Stemilt Growers and Shelby, OH-based R.S. Hanline and Co. Inc. BB #:126765, sought a temporary restraining order and preliminary injunction against the companies, Jaynes, Jason Birt and Rick Renzaglia, saying the defendants have retained counsel to file Chapter 11 bankruptcy.
The downslide has been noted in the companies’ Blue Book ratings over the past two years, with a steady decline to (86) F, indicating 60+ day pay terms, and severe financial considerations.
Social media also has been an avenue for discussion of the business’ downfall, with a series of articles published on LinkedIn by Jason Vee of Vee’s Marketing Inc., Superior, WI, BB #:138420 criticizing the third party acquisition and the number of vendors left unpaid.
“We as produce professionals should care because H. Brooks and J&J Distributing are leaving a trail of debt that is hurting other businesses,” Vee said. “Some companies may not survive the losses.”
Updated to include comments from former CEO Ron Carkoski.