By Ken Roseboro
Stress of COVID-19 pandemic and company’s secured debt obligations cited as reasons for bankruptcy filing
Pipeline Foods, LLC, a Minnesota-based supplier of organic and non-GMO grains and oilseeds, recently filed for Chapter 11 protection in Delaware bankruptcy court, claiming between $100 million and $500 million in liabilities.
In a company press release Pipeline said it will file motions with the bankruptcy court that would allow it to continue operations and pay employee wages and benefits “without interruptions.” The company also said it “will continue its pre-filing efforts to evaluate any and all strategic alternatives, including a sale of all or substantially all of the assets of its businesses in an effort to maximize value and recovery for all creditors.” Pipeline also said that it “expects to request authority to sell its grain inventory outside of the ordinary course at market prices in an effort to facilitate the company’s use of cash collateral.”
Anthony Sepich, chief executive officer of Pipeline Foods, LLC, said, “[t]he impact of the Coronavirus (COVID-19) pandemic coupled with the Company’s secured debt obligations have caused significant financial distress on our business. As a result, we believe that a bankruptcy filing and a potential sale of the business, portions of the business, and certain of its assets is the best path forward to unlock value for the benefit of all creditors. I would like to thank all of our employees, growers, customers, and business partners for their dedication and continued support through these unprecedented times.”
In July, the Minnesota Department of Agriculture held an online meeting with Pipeline’s creditors. Minnesota Agriculture Commissioner Thom Peterson told people on the video call that the department saw the bankruptcy as a “serious issue that we’re looking at all angles on.”
Pipeline estimated funds “will be available for distribution to unsecured creditors,” which the company estimated to be 200 to 999. Pipeline estimated $100 million to $500 million of both assets and debts.
Pipeline, with headquarters in Fridley, Minnesota, supplies organic and non-GMO grains, oilseeds, food and feed ingredients, soybeans and oil, and food grade corn. The company’s mission has been to build “a healthy, traceable, and sustainable food system.”
Pipeline was launched in 2017 with funding from New York-based private equity firm Amerra Capital Management, which is listed as the owner of 97% of Pipeline’s equity on the bankruptcy petition.
In 2019, Pipeline purchased SunOpta Inc.’s specialty and organic corn and soy business and Organic Venture’s ancient grains and specialty products business.
In its bankruptcy petition, the company said that it has between $100 million and $500 million in assets and subsidiaries in Canada and Argentina.
Additional sources: Law360, AgWeek
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Organic & Non-GMO Insights August 2021