Company provides supply chain solutions for organic, non-GMO feed ingredients
Pipeline Foods LLC 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.
Details on the company’s Chapter 11 process and go-forward strategy are as follows:
Continued operations: The company 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.
Evaluation of strategic alternatives to maximize value: The company 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. 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.
The first hearing has been scheduled for July 14.
Anthony Sepich, CEO of Pipeline Foods, said “the 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.”
Pipeline Foods is represented by Saul Ewing Arnstein & Lehr LLP with Michael Gesas as lead counsel. Pipeline Foods’ financial adviser is SierraConstellation Partners. The chief restructuring officer for Pipeline is Winston Mar of SierraConstellation Partners. The claims agent for Pipeline Foods is Stretto.