Sterling Caviar, based in Elverta, has been placed into receivership following claims by creditors that the company is indebted to them by over $23 million.
The company was acquired by Eugene Fernandez for $6.2 million in October 2020 from Stolt-Nielsen through his holding company, Hyde Road Agricultural Associates. In April 2020, Sterling Caviar secured a $14 million loan from CapitalView Investment Partners and Hunter Street Partners. This funding was intended to boost its caviar production facilities at the former Lazy Q Fish Ranch in Dixon, California.
At the time of purchase, Fernandez expressed to SeafoodSource his plans to substantially increase the production and distribution of domestically sourced caviar. He anticipated that acquiring one of America’s oldest and largest caviar producers would facilitate this expansion.
However, court filings indicate that in January 2024, CapitalView and Hunter Street petitioned for Sterling to be placed into receivership, a motion that a Solano County judge approved, as reported by the Sacramento Business Journal. The private equity firms allege that Hyde Road stopped making debt repayments in early 2023 and raised concerns over the welfare of Sterling’s sturgeon, which are estimated to be worth $24 million.
According to the creditors, the financial difficulties at Sterling have resulted in the sturgeon not receiving adequate feed or aeration, placing their survival at risk. Court documents reveal that the fish had been left unfed for up to two weeks.
In defense, Fernandez contested the claims of fish mistreatment in his response to the court filing. “I would never permit the company to do anything to harm the fish or any other assets of the company,” he stated, noting that damaging the assets would be self-destructive.
The creditors also expressed significant concerns about questionable financial transactions and inconsistencies in the financial reports provided by Hyde Road Entities.
Despite efforts to oppose the receivership, Fernandez acknowledged that Hyde Road had repaid $6.4 million of the debt, arguing that the company’s inventory and other assets were sufficient to cover the remaining debt.
Meanwhile, another creditor, Sachem Capital Corp., issued a notice of default against Sterling for $3.15 million, with the company’s headquarters and processing facility in Elverta serving as collateral. Sachem has delayed foreclosure proceedings as it seeks a resolution with Sterling.
