![]() It bumps Equilibrium to the front of the line among creditors should money start to run dry toward the end of the bankruptcy process.Īs for AppHarvest’s leased office space in downtown Lexington, “the company will be evaluating existing contracts over the next 60 days.” Will AppHarvest employees lose their jobs? This is what’s known as “debtor-in-possession” financing. “We have funding to keep the business running as usual for the next 60 days at Morehead, Richmond and Somerset,” Parman added.Įquilibrium, which filed a foreclosure suit against AppHarvest demanding repayment of more than $60 million in debt, will provide the cash necessary to help AppHarvest continue operations, AppHarvest said in a statement Monday. The goal is to minimize any disruption to employees,” company spokesman Travis Parman said Monday. A section of the lease related to “minimum production volumes” had been violated, Mastronardi alleged.Īs for the other three farms: “Over the next 60 days, we’ll be working to sell the farms to investors with the hope that they stay operational and continue to employ about the same number of folks as now. One possible wrinkle: Mastronardi already has taken possession of the Berea farm through a sale-leaseback agreement, generating much-needed cash for AppHarvest, and it recently announced that it plans to terminate AppHarvest’s lease on the facility. or another affiliate, AppHarvest said, “in exchange for approximately $3.75 million, additional incremental funding and support for the company’s restructuring plan.” It’s handing over the Berea farm, either to its partner and distributor Mastronardi Produce Ltd. Will AppHarvest stay in business?ĪppHarvest grows produce in four huge, indoor farms around Eastern Kentucky - in Morehead, Richmond, Berea and Somerset.īut that might not be true for much longer. Jones now must approve every significant step AppHarvest takes until it emerges from bankruptcy. Jones is the judge assigned to the AppHarvest bankruptcy. Jones, for streamlining the local dockets into a relatively speedy machine that can process even the most complex corporate reorganizations. The Houston Chronicle credits the court’s chief judge, David R. Penney, Men’s Warehouse and other famous corporate names have flocked to this court to ask for help with their debts. Bankruptcy Court in the Southern District of Texas, in Houston, which in recent years has become the nation’s most popular venue for Chapter 11. Why go to Texas?ĪppHarvest chose the U.S. In the last few years, AppHarvest has been hit with a number of investor lawsuits alleging fraud after the collapse of the company’s stock price. Incidentally, Chapter 11 bankruptcy also acts as a shield against litigation, putting all pending cases on hold. AppHarvest says Dalsem holds $14.8 million in unsecured claims. Its largest creditor by far is Dalsem Greenhouse Technology of the Netherlands, which built AppHarvest’s enormous greenhouses. It identified its 30 largest unsecured creditors, who hold about $26 million in unsecured claims. Related News: What's Going On With Applied Digital Stock?ĪPPH Price Action: According to data from Benzinga Pro, APPH shares are trading 66.7% lower at 11 cents at the time of publication.In 14 separate bankruptcy filings Sunday, covering its different subsidiaries, AppHarvest claimed between $50 million and $100 million in assets and liabilities. ![]() ![]() "The Chapter 11 filing provides protection while we work to transition operation of our strategic plan, Project New Leaf, which has shown strong progress toward operational efficiencies resulting in higher sales, cost savings and product quality." "The AppHarvest board of directors and executive leadership evaluated several strategic alternatives to maximize value for all stakeholders prior to the Chapter 11 filing," said AppHarvest CEO Tony Martin. The company stated that operations will continue at the farms, and it has also obtained a commitment from Equilibrium, the company's largest secured creditor, to provide approximately $30 million of debtor-in-possession (DIP) financing to provide the necessary liquidity to support operations.ĪppHarvest is also pursuing a transition of its AppHarvest Berea operations to its distribution partner, Mastronardi Produce, or one of its affiliates, in exchange for approximately $3.75 million in additional funding. The company announced its Chapter 11 filing to support a financial and operational transition.ĪppHarvest announced that it is pursuing a financial and operational transition in order to reduce its outstanding liabilities. ![]()
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