Hops grow on a vine. A judge has approved Willamette Valley Hops’ bankruptcy plan. (Courtesy Willamette Valley Hops)

A bankruptcy judge has confirmed the reorganization plan of an Oregon hop merchant, which features the sale of a farm property and a drastic workforce reduction.

Last year, Willamette Valley Hops of St. Paul, Ore., filed for Chapter 11 bankruptcy protection, allowing the company to restructure its debt and operations while shielding its assets from creditors.

Under the company’s reorganization plan, unsecured creditors with claims over $10,000 are expected to recover between 5% and 11% of the money they’re owed, while those below that threshold would be repaid for 50% of their claims.

U.S. Bank will also be fully repaid for an unsecured claim of nearly $1 million and taxes owed to the federal government and several states will be repaid in full, though in some cases the payments will be made in installments.

The reorganization plan allowed Willamette Valley Hops to raise funds by either selling an equity share in the business or a 60-acre property owned by one of its founders.

Bankruptcy documents indicate the equity sale was not successful, resulting in the farm property’s sale to Lone Oak Hop Farms of Woodburn, Ore. for nearly $1.7 million. The company expects to lease its office and warehouse on the property back from the new owner.

Aside from the sale, Willamette Valley Hops has reduced its operating costs by more than 80% by decreasing its staff from 11 to 3 employees and eliminating all of its advertising and sales expenses, among other measures.

“To increase its overall ability to supply its customer base WVH will make new partnerships with more hop vendors to supply a wider range of products, some of which will have lower costs for the marketplace,” according to the plan.

The company was founded in 2009 by Bruce Wolf, who sold the farm property to fund the plan, initially as a seller of hop rhizomes to backyard growers, before eventually earning most of its revenues from selling hops to breweries, the document said.

Willamette Valley Hops grew its sales to nearly $20 million in 2019, when it earned a net profit of about $1.6 million, but “high overhead” eventually led to the bankruptcy filing in 2024, the document said. “The expenses that led to the bankruptcy were over purchasing of inventory that went unsold and too much being paid for wages and rent.”

The company also blames its financial troubles on a deal with a major hop merchant, which allegedly contributed to its “over-contracting of future hop purchases” that went unsold when demand began to decline in 2020.

“WVH spent on average $858,000 more per year than it earned between 2021 and the end of 2023, creating an operating loss of over $2.5 million,” the document said.