Files
Abstract
This paper examines the market and organizational factors that led to the bankruptcy
in July 2000 of Tri Valley Growers (TVG), a California tomato- and fruit-processing
cooperative owned by more than 500 growers. TVG’s bankruptcy was caused by
a confluence of organizational and market-related factors including a low productivity
of assets due to high inventory levels and obsolete facilities, high operating
costs relative to competition, high raw product transport costs due to the geographic
mismatch of production and processing capacity, particularly in tomato operations,
and a poor information system. TVG was also highly leveraged. Re-organization as
a new-generation cooperative in 1996 failed to stabilize the equity base.