In an attempt to thwart the efforts of a group of disgruntled Richmond investors, a Middle Peninsula oyster company is eyeing Chapter 11 bankruptcy protection.
Oyster Company of Virginia asked the federal bankruptcy court last week to allow it to go into Chapter 11 to deal with debt claims made by several of its early investors, a list that includes at least two Richmonders.
The company’s request for Chapter 11 was made in response to an involuntary bankruptcy petition made earlier in the month by those investors, who sought to push the company into Chapter 7 liquidation.
Founded in 2010 by Tolar Nolley and based in Topping, Virginia – about 60 miles east of Richmond near the Rappahannock River – Oyster Company of Virginia sells memberships to its oyster cage co-op program dubbed “Oysters for Life,” and has worked to create a program for trading tax credits earned from nutrient remediation by putting spent oysters shells back into the water.
The Oysters for Life program sells memberships to sponsor an oyster cage, by which members then can receive two dozen oysters a year for life, while at the same time supporting an oyster farmer by helping fund the purchase of the cage.
The involuntary bankruptcy filing was made by Bill Loughridge, president of local construction company Loughridge & Co., and his wife Patricia. Bill Loughridge also filed on behalf of Half Shell Partners LLC, which shares its address with Loughridge & Co. at 5711 Staples Mill Road.
The other petitioners are Chandler S. Weigand, and Jeffrey and Eleanor Orndorff, all of Maryland. Nolley said they were all early investors in OCVA.
In the initial bankruptcy filings, the investors claim they haven’t been paid for the contractual return on their investment of $122,500. Of that, Half Shell Partners claims it is owed $67,500, while the individuals each cite claims of $15,000.
Involuntary bankruptcy filings are typically made by creditors of a company to have a judge determine whether bankruptcy is warranted. If the judge agrees with an initial petition, a trustee would likely then be appointed to determine the state of the company’s assets, preserve them and potentially liquidate them to dredge up funds for creditors.
Asking for the case to be converted into Chapter 11 will allow the company to continue operating and block the initial attempt at liquidation, while it works out a plan to resolve the debt claims.
An email to Nolley was not returned by press time.
OCVA’s filing states that its proposed legal counsel for its pending Chapter 11 case would be veteran local bankruptcy attorney Lynn Tavenner.
The Loughridges and Half Shell Partners are represented by Hirschler Fleischer attorney Rachel Greenleaf. She did not return a call seeking comment.
Weigand and the Orndorffs did not name an attorney in the initial filing.
OCVA also in its filing asked to be able to reserve its right to object to any claims filed by its creditors and to have the ability to file claims against the creditors in the future.