MinAqua pulls the plug after continual lean years
RENVILLE — Having operated at a loss for the past few years, MinAqua Fisheries Inc. of Renville has filed for bankruptcy protection and ceased operations, according to the attorney assigned the case.
Attorney Brian Leonard, of Minneapolis, said he is now actively searching for a buyer for the MinAqua facility in Renville, and looking to sell the fish remaining in its tanks.
MinAqua’s assets will be liquidated under Chapter 7 bankruptcy proceedings.
The only farmer-cooperative aquaculture operation in Minnesota has been raising tilapia at the facility since October 1997. It raised roughly 125,000 pounds of fish per month, which were sold as live fish to markets primarily in large urban areas, including Minneapolis but especially the Canadian cities of Toronto, Ontario, and Vancouver, British Columbia, and Calgary, Alberta.
There were about 100,000 live fish in the MinAqua tanks when operations ceased on Sept. 12.
There was only about $200 remaining in its bank account, according to the court record.
Leonard obtained the court’s authority to obtain up to $40,000 in financing from the former chairman of the board of MinAqua, Leon Greenslit of rural Olivia. The funds are needed to keep the facility operating until the fish can be removed. Greenslit is now taking care of the fish and assisting in the effort to sell them.
Most of the market-weight tilapia of more than one pound — or about 20 percent of the total — have been sold in the last couple of weeks. The remaining fish will likely need to be sold to a rendering facility as they are too small to market for human consumption, according to Leonard.
Greenslit said he remains hopeful that a buyer can be found to continue aquaculture operations at the facility. It is a single-use building, he and Leonard noted. It holds 24 separate, built-in cement tanks for the fish, as well as the equipment to oxygenate and filter the water.
“It’s functional, we just kind of ran out of time,’’ said Greenslit of the recent turn of events.
He attributed the economic difficulties to a number of issues, but declined to describe them.
Former CEO Mel Stocks did not return calls seeking comment. In March 2008, he told The Land publication that the company was contending with high input costs for feed and electricity, as well as wastewater treatment costs and higher-than-acceptable mortality rates for fingerlings.
MinAqua faced tough competition from overseas. Producers in Central and South America and Asia raise the warm water fish in outdoor ponds without the energy costs associated with production in Minnesota. They also enjoy lower labor costs. MinAqua sold its fish as live product because it could not compete with the low-cost foreign producers who dominated the frozen fillet markets, where the most sales growth was occurring, Stocks told The Land.
There were seven or eight employees at MinAqua when it ceased operations, according to Leonard.
Just one month before it ceased operations, the cooperative prevailed in a civil lawsuit filed by a long list of shareholders who had challenged their contractual obligation to provide soybeans for use as feed for the fish.
Greenslit and Leonard said there have been some inquiries about purchasing the facility to maintain it as a going concern, but no negotiations are occurring. The company property also includes 20 acres of land, which could be sold for agricultural use, Leonard noted.
Court records show a long list of creditors, including a variety of suppliers and the city of Renville. It placed an assessment on MinAqua’s property taxes in July, with the current outstanding balance owed the city at $167,774.33.
Greenslit holds an existing mortgage of $150,000 on the property, according to the court records.
When it opened in 1997, MinAqua included 307 farmer-owners and it represented a $4.5 million investment. Federal funding allowed the city of Renville to develop a system to utilize waste energy from the Southern Minnesota Beet Sugar Cooperative. The city sold the heat to MinAqua at a favorable rate to keep 1 million gallons of water at 85 degrees Fahrenheit, according to Tribune archives.