A well-known U.S. Bolognese processor files for bankruptcy, with liabilities in the millions of dollars

John Norton, owner of Cozy Harbor, filed documents with the Maine bankruptcy court showing the company still owes $4.9 million of its $8 million loan from KeyBank, and an additional $330,000 to Camden National Bank.

Norton stated that during the COVID-19 pandemic, lobster prices experienced significant volatility, and the company was further impacted during trade wars, with market conditions making it difficult to maintain operations at a reasonable profit margin.

Cozy Harbor, founded in 1980, initially processed bottom fish and transitioned to lobster processing in 1993, primarily producing fresh and frozen lobster tails. In recent years, the company expanded into value-added product processing, winning awards for its vacuum-sealed frozen lobster products. The company's products are mainly exported to Canada, Asia, and Europe.

The bankruptcy filing lists unsecured creditors including East Coast Seafood ($1.375 million), Louisbourg Seafood ($803,000), Whitecap International ($342,000), Northern Ocean Sea Products ($265,000), and Cape Bald Packers ($206,000).

Norton indicated the company explored various methods to address debt from high lobster purchase costs, including out-of-court sales and refinancing. Ultimately, the company chose to file Chapter 11 to stabilize its balance sheet and maximize enterprise value.

"The Chapter 11 filing will provide Cozy Harbor with a mature process and legal protection, helping the company efficiently and effectively achieve long-term financial and operational goals, while creating a fair environment for potential asset sales that maximize enterprise value for all creditors," Norton said. "For 45 years, Cozy Harbor Seafood has been a leading exporter of Maine's iconic lobster globally and a reliable partner for local fishermen and coastal communities."

"Despite challenges over the past 45 years, our business is deeply integrated into Maine's social, cultural, and economic fabric, which is worth preserving. Therefore, we've made this difficult but important decision. Chapter 11 bankruptcy can help us continue doing what we do best—processing, packaging, and selling high-quality seafood, while laying the groundwork for the company's future success, and potentially a future ownership transition," Norton said.

During the Chapter 11 reorganization, Cozy Harbor will maintain operations at its processing and packaging facilities on