National Frozen Foods, the company that won the right to purchase some of the assets of NORPAC Foods in bankruptcy court has sued the farmer-owned cooperative for $7.1 million.
National Frozen Foods is a vegetable processing company that is owned by entrepreneur Frank Tiegs. It filed suit in bankruptcy court March 6 alleging the company mis-classified 19.7 million pounds of inventory during the purchase.
NORPAC filed for Chapter 11 Bankruptcy protection in August 2019, stating it had $164 million in debt and $315 million in assets.
The Tiegs-owned Oregon Potato Company won a bidding war in bankruptcy court with Simplot to purchase the Quincy, Washington processing plant, assets like intellectual property and contracts and the goods NORPAC had processed and had in inventory for $107 million in December.
Days later, NORPAC sent the company an invoice reflecting a purchase price of $10,262,443 for all fruits and vegetables it had in its possession, according to the asset purchase agreement.
The lawsuit states its inspection of the millions of pounds of inventory determined the fruits and vegetables NORPAC classified as finished product contained sand, excessive stalks and products containing insects or foreign materials.