Pipeline Foods files Chapter 11 bankruptcyPipeline Foods files Chapter 11 bankruptcy
COVID-19, debt caused significant financial distress on business.
July 13, 2021
Pipeline Foods LLC, the first U.S.-based supply chain solutions company focused exclusively on non-GMO, organic, and regenerative food and feed, recently announced that it and certain subsidiaries and affiliates have filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (Bankruptcy Court).
The company said it will be filing customary motions with the Bankruptcy Court that will authorize, upon Bankruptcy Court approval, the company's ability to operate within a cash collateral budget, including, among other things, the payment of employee wages and benefits without interruption and the use of cash collateral. These motions are typical in the Chapter 11 process and the company anticipates that they will be approved shortly after the commencement of its Chapter 11 case.
The company will also 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. In parallel with this process, the company 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.
"[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,” said Anthony Sepich, chief executive officer of Pipeline Foods. “I would like to thank all of our employees, growers, customers, and business partners for their dedication and continued support through these unprecedented times."
The first hearing has been scheduled for July 14, 2021.
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