Trinitas Farming is seeking $30 million in debtor-in-possession financing to keep its more than 7,000 acres of almonds producing during the crucial pollination period and beyond.

published on February 21, 2024 - 2:01 PM
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Central Valley almond grower Trinitas Farming LLC filed for Chapter 11 bankruptcy protection Monday with around $188 million in debt.

The “investment vehicle” was organized by Redwood City-based private equity firm Trinitas Partners in 2015 to acquire and operate almond ranches in the Central Valley, according to court documents. Trinitas Farming operates 17 almond ranches covering 7,856 acres in Fresno, Tulare, San Joaquin, Contra Costa and Solano counties.

As part of a reorganization plan, Trinitas Farming will sell its almond ranches.

Some of the other Trinitas debtor corporations also filing for bankruptcy protection include Dinuba Ranch, LLC; Porterville, LLC; Tule River Ranch, LLC; Adobe Ranch, LLC; Jeffrey Ranch LLC and more. 

Debts include a $130 million term loan extended by Rabo Ag in November 2022, plus an additional $31 million in “delayed draw” loans. Debts owed to 20 of the largest unsecured creditors total more than $26.6 million.

Its largest unsecured creditor is The Almond Co. hulling operation in Madera, with a $9.2 million claim. The Harvesting Group in Fresno is owed $4.8 million.

Trinitas Farming has asked a bankruptcy judge to approve a $30 million loan to maintain its operations through reorganization and sale of its portfolio. 

“The Debtors enter these Chapter 11 Cases with almost no cash, during a critical period in the almond-growing season,” according to court documents.

Trinitas requires $1 million in the first week of bankruptcy and $6.5 million for the first five weeks to keep running.

“The cost of irrigation, fertilizers, chemicals, and pollination alone — without which the Debtors will not be able to support their almond orchards — exceeds $520,000 during the first week and $2.2 million in the first five weeks,” according to court documents.

These latest bankruptcy cases follow the collapse of stone fruit giant Prima Wawona, with 14,000 acres of land coming on the market. Prima Wawona was also run by a private equity fund.

Agricultural real estate professionals expect land values to fall, according to The Business Journal’s 2024 San Joaquin Valley Ag Magazine, with some areas witnessing a slight decline and others facing more significant decreases. The changes will depend on the water situation and specific farming regions.

With the current surplus of available properties and existing capital constraints, Realtors anticipate a challenging year. Scott Schuil, vice president of Schuil Ag Real Estate in Visalia, expected a significant rebound shortly if the almond price rallied and interest rates were lowered.

Now with another company aiming to sell its vast amount of acreage, this could further depress prices. 

“We anticipate that this trend will persist through 2024. Farmers are eager for an increase in commodity prices, an increase in foreign exchange rates compared to the U.S. Dollar, and abundant snowfall in the mountains this winter,” said Sullivan Grosz, ag division president for Pearson Realty in Fresno. 

Grosz noted a significant influx last year of distressed sales across various commodities. Large properties — including nuts, table grapes and stone fruit — hit the market, signaling a shift from previous years.

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