An Oregon hop merchant’s founder would sell his 60-acre farm to repay the company’s debts under a reorganization plan it recently filed in bankruptcy court.

Under the plan, Willamette Valley Hops of St. Paul, Ore., has already substantially reduced its overhead costs by eliminating half its workforce, from 14 to 7 employees, while restructuring its business during Chapter 11 bankruptcy proceedings.

Selling co-owner Bruce Wolf’s farm would help the hop broker fully repay U.S. Bank for about $1.6 million in loans secured with collateral, according to the plan’s disclosure statement.

The company would then lease an office and warehouse from the new owner of the property, whose location isn’t disclosed in the filing.

The company said it’s already stopped advertising and cut other business expenses but plans to further slash costs by using a less expensive cold storage facility and selling unnecessary vehicles.

By decreasing debt and boosting cash flow, the broker expects to purchase and sell an additional 14,000 pounds of hops per month to fulfill unmet customer demand, boosting monthly revenues from $500,000 to $700,000, the document said.

If the company is unable to buy the extra hops on favorable terms from John I. Haas of Yakima, Wash., a supplier to which it owes nearly $9 million, it would try to find an alternative supplier, according to the filing.

Last year, Haas filed a lawsuit alleging that Willamette Valley Hops failed to pay for hop deliveries, precipitating the company’s filing for Chapter 11 bankruptcy, which protects businesses from creditors while they restructure debt and operations.

Under the company’s reorganization plan, only the loans to U.S. Bank would be fully repaid while unsecured creditors owed more than $15,000, such as Haas, would recoup about 11% of their claims.

Those owed less than $15,000 would recover about 90% of their claims, however. The company would also repay $1.25 million in taxes owed to the federal and state governments over 4½ years under the plan.

Willamette Valley Hops appears to partly blame a former Haas executive for its financial problems, claiming he was responsible for the company’s “over-contracting of future hop purchases.”

“The additional millions that WVH owed for hop products that were not sold to customers, along with the overhead mismanagement, helped push WVH into insolvency,” the document said.

Willamette Valley Hops was started by Wolf in 2009 as a supplier of hop rhizomes for backyard growers, but within three years the company was selling three times as many hops for brewing as rhizomes for planting, according to the filing.

By 2019, the company was earning more than $19 million in revenues but turmoil associated with the COVID pandemic decreased its sales to less than $12 million in 2023 while its operating expenses remained the same, the document said.

Between 2021 and 2023, Willamette Valley Hops was annually spending about $860,000 more than it earned, resulting in a $2.5 million loss during that time, the document said.

Since then, however, the company has reduced its monthly operating expenses from about $245,000 to less than $120,000, according to the plan.

If the reorganization plan is voted down by creditors or the company defaults on its obligations, Willamette Valley Hops may be liquidated under a Chapter 7 bankruptcy proceeding.

However, the company estimates that a liquidation of its assets will return about $895,000 to unsecured creditors, while they stand to recover more than $950,000 under the reorganization plan, paid in installments through September 2029.

Dates haven’t yet been scheduled for creditors to vote on the plan or for the bankruptcy court to confirm it, but a hearing on the matter is set for July 16.