Normal Business Operations to Continue Under Chapter 11 Process
ONSTED, Mich. (Oct. 1, 2013) – Groeb Farms, Inc., a major U.S. honey packer, has announced that it has reached an agreement with its lender, a private equity firm, to recapitalize the company and invest additional capital into the business. The transaction will be consummated through a plan of reorganization (the “Plan”) which was filed Oct. 1 along with the company’s voluntary Chapter 11 bankruptcy petition with the United States Bankruptcy Court for the Eastern District of Michigan. Upon confirmation of the proposed Plan, the company’s debt will be restructured, and the company’s capitalization will be dramatically improved. The Plan already has the support of the company’s major constituents, including its pre-petition lender and certain of its subordinated debt holders. The company expects to emerge from bankruptcy within 90 days, in a stronger, financially sound position.
The private equity pre-petition lender will financially support the company through the reorganization process. This lender was identified through an extensive marketing process conducted by Houlihan Lokey, an international investment banking firm.
Groeb Farms CEO Rolf Richter commented, “First and foremost, we want to indicate how pleased we are to be able to recapitalize the company. We also want to assure customers, vendors, employees and all other stakeholders that the company will continue normal business operations during the reorganization process, which is expected to last approximately 90 days. This is a very desirable outcome for Groeb Farms. It allows us to restructure with strong financing in place. The bankruptcy is based on a prepackaged reorganization that releases the company from its legacy liabilities, allowing us to emerge as a strong, well-capitalized company, under new ownership, with a continued commitment to world class products and services, customer satisfaction and supply chain integrity.”
In conjunction with its filing, the company is seeking approval of its debtor-in-possession (DIP) financing. The DIP financing provides ample capital to successfully execute the Plan. It also provides greater liquidity such that the company expects to be able to satisfy all future customary obligations associated with the normal course of business, including employee wages and benefits and payment of post-petition obligations to vendors.