Groeb Farms confirms prearranged honey-packager restructuring
The court confirmed Groeb Farms’ Second Amended Plan less than three months after the privately held Michigan honey processor filed Chapter 11 on Oct. 1, 2013. Groeb entered the case as a leading processor and packager of honey for food manufacturers, food-service customers and retailers, with headquarters in Onsted, Michigan, a San Bernardino processing facility, a Belleview, Florida testing lab, about 88 workers and $137.8 million of 2012 net sales source filing source filing. The first-day record identified HC Capital Holdings 0909A as senior secured lender under a $25 million revolver and $1.12 million term loan, $7 million of senior subordinated secured debt, $1.5 million of junior unsecured insider debt to Ernest Groeb and about $15.0 million of trade debt source filing.
The filing was driven by liquidity pressure from credit defaults, a $750,000 availability reserve, DOJ transshipped-honey issues tied to a $2.0 million deferred-prosecution fine, and putative class actions carrying treble-damages exposure. Groeb launched the case with restructuring support from Honey Financing Company, senior subordinated lenders Argosy and Marquette, and interim class counsel, plus a requested $27 million DIP/cash-collateral package to fund raw materials, payroll and operations through emergence source filing. The confirmation order resolved producer/packer and class-representative objections, authorized plan implementation including new equity, new warrants, exit facility documents, new subordinated notes, a management incentive plan and a general unsecured claims litigation trust source filing.
