Bankrupt mushroom farm faces uncertain future

Courier photo by John Waters The defunct Colorado Mushroom Farm near Alamosa and the Blanca Massif in the background. The company has sought protection in federal bankruptcy court.

ALAMOSA — A group of former employees of the Colorado Mushroom Farm in Alamosa gathered at a meeting on Saturday afternoon, Feb. 18, to learn what the future might hold for themselves and the mushroom farm after the business that employed 200 people shuttered its doors in September of 2022.

The purpose of the meeting, organized by Flora Archuleta, executive director of the SLV Immigration Resource Center, and facilitated by Minsun Ji, executive director of the Rocky Mountain Employee Ownership Center (RMEOC), was to discuss in detail what those future options might be.

It was apparent before the meeting started that this was not “just a job” to many of the people who worked there. According to a survey of 80 former employees conducted by RMEOC, more than half of the people had been employed at the mushroom farm for more than 10 years with some having worked there for decades. Even when the future of the business looked doubtful, they continued to go to work every day, despite learning there was a chance that the paychecks they were handed at the end of the week were not going to be any good.

Also, many of the workers who worked at the mushroom farm come from the same place — Santa Eulalia, a mountainous region in northwestern Guatemala. Work provides them with a sense of stability and community in a valley where they are in the minority.

Despite working in unsafe conditions — one woman shared with the Valley Courier that, more than once, she had seen people fall off an 8-foot scaffold with no railings while trying to pick mushrooms on the top level, one of whom was pregnant and another who broke her wrist — or extremely uncomfortable working conditions. Another woman reported being told to “just put a sack over her clothes” when they were spraying down the mushrooms. Still, 87% of the former employees surveyed said they would like to return to the mushroom farm to work again.

The demographics of the former employees also suggest that picking up and moving is not an immediate option. According to the survey, two-thirds of the workers range in age from 40 years old to older than 60 and 92% have families.

When asked why they wanted to return to a hard job in difficult conditions, the answer was not related to demographics or circumstances.

As one woman said, “Porque es lo que hago. Porque es mi trabajo.”

“Because it’s what I do. Because it’s my job.”

But the question of why someone would want to work at the mushroom farm was not the topic of Saturday’s meeting. The focus of the meeting was to present information, explain options and learn more from the mushroom farmworkers about under what structure would they want to return to work at the farm, including the possibility of walking through the doors every morning not just as employees but as potential owners of the business.

Based on some of the comments from the former employees who attended the meeting, the idea of working for someone other than Baljit Nanda — longtime owner and manager of Colorado Mushroom Farm — has not been seriously considered. Nanda has reportedly told former employees he plans to re-open the farm and bring back the growers and pickers.

In a 9News-Denver interview, Nanda blames the company’s financial difficulties on the pandemic that reduced the market compounded by an outbreak of COVID-19 that impacted the workforce. And comments suggest that at least some of the workers believe him.

But information apparently not shared with the former employees but discussed with workers by Ji on Saturday presented a different scenario.

Colorado Mushroom Farm filed for Chapter 11 bankruptcy in December of 2022. Public bankruptcy court documents obtained by the Valley Courier seem to indicate the financial problems began long before the pandemic. In 2012, Rakhra Mushroom Farm Corporation, operating at the same location, also filed for bankruptcy protection. Nanda is listed as a director of that enterprise in court documents.

A “list of the top 20 unsecured creditors” and the amounts owed total more than $4.3 million, including $882,795 owed to the IRS, $367,634 to the Colorado State Department of Revenue, $79,289 due the state for unemployment insurance, $224,670 to Public Service, $242,606 to the Alamosa County Treasurer and $126,718 to the “Mushroom Council”, for which the USDA has already brought suit against the company.  

Those numbers do not include other investments that, according to RMEOC, who has become familiar with the history of the business and its current state of operation, are necessary to make the business safe, operational, and viable, once again.

In her presentation to the former workers, Ji cited major areas that needed significant investment, including an update of digital technology, long overdue repairs to the building itself, and addressing a problem with a hazardous level of arsenic in the water on the property — all problems with which Nanda is familiar.

Ji estimates that to address those significant issues — some of which are directly related to the safety of the workers — Nanda would need working capital of around $5 million to $6 million, not including the minimum of $4.3 million needed to address his creditors.

Yet, even against what may seem to be a daunting prospect of the mushroom farm ever opening again, RMEOC conducted an in-depth feasibility study gauging the likelihood that the mushroom farm could be profitable. The results were promising.

Ji summarized the 166-page report in simple terms, “It might take two years, but it could be a very profitable business.”

Archuleta backed that up, stating that there are funders who are interested in seeing the business — and the lives of the workers — brought back in a manner that would be a success for all.

It is still unknown what actions may be taken by the bankruptcy court or the status of Nanda’s insistence — at least as it is reported — that he wants to maintain the business. Those are serious considerations, serious unknowns.

Ji also presents another realistic alternative: it might be in the hands of the workers to determine their future, and possibly, the mushroom farm's future.

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