AppHarvest latest news: Bankruptcy updates

AppHarvest latest news: Bankruptcy updates
Image provided by AppHarvest

Bankruptcy Proceedings: AppHarvest, Inc. has filed for Chapter 11 bankruptcy, leading to the cancellation of its common stock.

​​​​​​Asset Disposition: The company has completed the sale of major assets associated with its Somerset, Kentucky facility.

Securities Deregistration: AppHarvest intends to deregister its securities and suspend reporting obligations with the SEC.

Impact on Shareholders: The bankruptcy proceedings and subsequent actions significantly affect shareholder rights and investments.

Future Outlook: The company’s strategic moves suggest a major restructuring effort.

Bankruptcy Filing and Plan Confirmation

In a significant development, AppHarvest, Inc. has reported updates on its Chapter 11 bankruptcy protection initiated on July 23, 2023. This filing, which includes AppHarvest and its affiliates, marked a pivotal moment for the company in addressing its financial challenges.

Subsequently, on September 14, 2023, the United States Bankruptcy Court for the Southern District of Texas approved the Second Amended Joint Plan of Liquidation. This plan set forth the terms for the company’s restructuring and debt resolution. By December 5, 2023, all conditions for the plan were met according to a recent Form 8-K filed by the company, leading to its effective implementation. Notably, this led to the cancellation and discharge of all outstanding shares of AppHarvest’s common stock, fundamentally altering the company’s equity structure.

Asset Sale and Disposition

Parallel to the bankruptcy proceedings, AppHarvest has actively restructured its assets. On September 6, 2023, the Court approved the sale of principal assets related to the AppHarvest Pulaski Farm in Somerset, Kentucky. This transaction was executed under an Asset Purchase Agreement with Bosch Berries Kentucky Operations Corp., culminating in the disposal of these assets on December 1, 2023.

Impact on Shareholders and Future Reporting

The restructuring process has materially impacted AppHarvest’s shareholders. Canceling common stock under the Chapter 11 Plan significantly affects shareholder rights and the value of their investments. Furthermore, AppHarvest plans to deregister its securities and suspend its reporting obligations with the Securities and Exchange Commission (SEC). This decision will lead to the cessation of periodic and current reports, including Forms 10-K, 10-Q, and 8-K.

AppHarvest Latest News

AppHarvest Enters Multiple Lease Agreements Amid Chapter 11 Bankruptcy Proceedings (2023/09/21)

On September 14, 2023, AppHarvest signed three lease agreements with Equilibrium for properties in Richmond and Morehead, Kentucky. This comes after AppHarvest filed for Chapter 11 bankruptcy on July 23, 2023. Equilibrium is required to maintain property insurance for Furniture, Fixtures, and Equipment (FF&E) during the term of the agreements. The bankruptcy court confirmed the company’s plan of liquidation on September 14, 2023. The company warns security holders that trading in its securities during the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks.

AppHarvest Initiates Chapter 11 Proceedings: Pursues Operational Transition for Debt Reduction and Job Preservation (2023/07/24)

AppHarvest, Inc. today revealed plans for a financial and operational transition to decrease its outstanding liabilities. While it navigates this transition, the company will sustain its operations at all of its farm locations and continue to distribute its products to leading national grocery chains, restaurants, and food service providers. AppHarvest, which is a public benefit corporation and a Certified B Corporation, has become renowned for its large-scale production of affordable and nutritious fruits and vegetables, as well as its focus on providing quality employment opportunities in the Appalachia region.

In order to facilitate this transition, the company has voluntarily filed petitions for Chapter 11 protection under the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the Southern District of Texas. Additionally, AppHarvest has secured a commitment from its largest secured creditor, Equilibrium, for debtor-in-possession (DIP) financing of about $30 million. This financial aid is aimed at maintaining operations at its Morehead, Richmond, and Somerset farms during the Chapter 11 process, though it is still awaiting the Court’s approval.

Simultaneously, AppHarvest is also planning to transfer operations of its Berea facility to its distribution partner, Mastronardi Produce, or one of its subsidiaries. In exchange for this, the company will receive approximately $3.75 million, along with additional incremental funding and support for its restructuring plan. However, this move is also dependent on the Court’s approval. The company’s board of directors and executive leadership, under CEO Tony Martin, is diligently working to restructure operations to both maximize the potential return for creditors and to safeguard jobs. AppHarvest is presently being represented by Sidley Austin LLP and Jackson Walker LLP as counsel, Jefferies LLC as investment banker, and Portage Point Partners as financial adviser.

AppHarvest Subsidiary Grapples with Debt Repayment, Announces Changes in Executive Leadership (2023/07/17)

AppHarvest Morehead Farm (AppHarvest Stock: APPH), a subsidiary of AppHarvest, received a Notice of Acceleration from lender Rabo AgriFinance on July 11, 2023, due to an alleged default in payment of certain principal and interest amounts. The non-payment, which was supposed to be made on July 3, 2023, led Rabo to demand immediate repayment of $47.2 million, inclusive of principal, accrued interest, additional fees, costs, and other related obligations under the credit agreement dated June 15, 2021.

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