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INDOOR VERTICAL FARMING LEADER AEROFARMS FILES FOR CHAPTER 11 BANKRUPTCY PROTECTION
Jun. 9, 2023
Source: AeroFarms news release
Newark, New Jersey -- AeroFarms a global leader in indoor vertical farming, today announced that, after careful consideration by its board, it has filed for voluntary protection under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.
In addition to the petition, the Company has filed various "first day" motions with the bankruptcy court requesting customary relief that will enable it to transition into Chapter 11, with limited disruptions to its on-going core business operations.
The company has also entered into an agreement with an existing group of AeroFarms investors to provide $10 million in debtor-in-possession ("DIP") financing, as part of a larger round of financing that includes those investors. Approval of the DIP financing is part of the first day motions filed with the bankruptcy court. Upon approval by the Bankruptcy Court, the DIP financing, together with cash generated from ongoing operations, is expected to provide AeroFarms with the necessary liquidity to support its operations during the bankruptcy process.
Prior to the filing of the Company's Chapter 11 case, the board of directors and executive leadership evaluated a range of strategic alternatives to maximize value for all stakeholders. With the protections afforded in the bankruptcy process, the Company is working with its DIP lender investor group on a transaction to enable it to quickly emerge from Chapter 11. During this time the Company will continue to explore other financing options so as to maximize the value of the Company and recovery to creditors.
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