Smallhold, Inc., a specialty mushroom vertical farming company, has emerged from Subchapter V Chapter 11 after the court confirmed a sponsor-backed reorganization plan in November 2024, with the plan becoming effective in September 2024. The case is now in its post-effective-date administration phase under a plan sponsored by Monomyth Group, which held 90.77% of the debtor's common stock at filing.
The Brooklyn-based debtor filed its voluntary Subchapter V petitionDkt. 1 on February 18, 2024, precipitated by a venture capital fundraising downturn, a flat fresh-mushroom category, and the capital intensity of controlled-environment agriculture that left the company unable to reach positive unit economics. Just eleven days before filing, Monomyth Group acquired its controlling stake, the founders resigned from the board, and interim leadership — Gustavo Reichmann as CEO and Tariq Jawad as CFO — was installed to manage the restructuring. According to the First Day DeclarationDkt. 8, Smallhold operated indoor mushroom farms in New York, Texas, and California supplying more than 500 retail locations, but was in substantially worse financial shape than previously disclosed and carried roughly $1.4 million in unsecured trade debt.
Early in the case the debtor moved to rationalize its footprint. Through its Omnibus Rejection MotionDkt. 49, Smallhold rejected unexpired leases and executory contracts tied to its shuttered Brooklyn and Texas farms and its Brooklyn office, concentrating operations at the 34,000-square-foot Vernon, California (SoCal) farm that served as the cornerstone of the go-forward business. The company also obtained court authority to use cash collateral and draw a $900,000 senior secured superpriority multi-draw term loan from Monomyth, which funded the case through confirmation. A supported additional first-day relief intended to keep operations uninterrupted and preserve estate value.
The restructuring culminated in the Subchapter V Debtor's Third Amended Plan of ReorganizationDkt. 250, a four-class plan backed by Monomyth as plan sponsor. Its economic core was a $500,000 convertible-note exit financing commitment from Monomyth, with the existing DIP loans converting into convertible notes that must convert to equity within five years if unpaid. General unsecured claims, totaling approximately $8.64 million, were directed to a $155,000 recovery pool guaranteed by Monomyth, while equity interests were left unimpaired. The plan was confirmed under Section 1191(b) by an amended order entered November 20, 2024, and the Third Amended Plan SupplementDkt. 276, filed shortly after confirmation, memorialized the executed convertible-note documents. The case now turns on plan consummation and distributions.
