Seattle investors buy bankrupt caviar firm

A pair of Seattle investors has purchased the assets of a bankrupt Arlington caviar company, seeing potential in the unique way it handles fish waste.

Round Gold, formed by Joseph Brotherton and Dan Nelson, bought Cossack Caviar's assets, including a 60,000-square-foot manufacturing facility and barge, for $5.15 million. The sale closed on Tuesday.

While Cossack sells mostly salmon caviar, it also markets a protein, called hydrolysate, made from processing the fish heads, guts and tails left after the eggs are collected.

"There's a lot of pressure in the industry to use 100 percent of the fish," Brotherton said. The process that Cossack uses to make hydrolysate from usually discarded waste is fairly new.

The process, Brotherton explained, grinds up fish discards, adds enzymes and converts the waste into a liquid protein, which can be used as a fertilizer and as feed for shrimp, other fish and livestock.

In 2000, Cossack partnered with Ocean Biosource of British Columbia to build a $4 million floating production plant on the barge, the Alaskan Venturer.

Ron Decker, the company's former chief executive, told the Alaska Journal of Commerce that the first year was so bad that Ocean Biosource pulled out.

According to court documents, Cossack Caviar lost more than $5.7 million on revenues of approximately $18.2 million in the past three years.

The caviar company filed for bankruptcy reorganization in April, claiming $14.4 million in liabilities, including taxes owed Washington and Alaska and debt to fishermen and transporters.

Round Gold is "primarily in the egg business," with about 85 percent of the business coming from caviar sales, Brotherton said. "My guess is that will change as we develop the business plan."

He plans to develop the hydrolysate sector. "It is not only good policy environmentally, we believe it will prove to be a good policy economically," he said.

Brotherton and Nelson, who own stakes in competing steel companies, became partners in 2000 with the purchase of Sweetlix, which makes livestock feed supplements, from a British agriculture company.

Amy Trask can be reached at 206-464-2032 or atrask@seattletimes.com.