AeroFarms files for Chapter 11 bankruptcy protection, continues to scale

by CEA inSight
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Indoor vertical farmer AeroFarms announced today that it’s filed for voluntary protection under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. In addition to the bankruptcy petition, the company filed various First Day motions with the bankruptcy court to enable a transition into Chapter 11 with limited disruptions to ongoing core business operations. The recapitalization process underway is expected to keep the company operational and strengthen it as it moves ahead.

The company has entered into an agreement with an existing group of AeroFarms investors to provide $10 million in debtor-in-possession (“DIP”) financing, as part of a larger financing round that includes those investors. Approval of the DIP financing is part of the First Day motions filed with the bankruptcy court. Assuming the court’s approval, the DIP financing combined with cash generated from ongoing operations is expected to provide AeroFarms with the necessary liquidity to support its operations during the bankruptcy process.

The company reports that the investor group’s primary focus is to assure that AeroFarms will continue normal operations throughout the Chapter 11 filing. Business-as-usual plans encompass servicing the company’s expanding customer base, key selling partners, and additional retailer expansions still planned for 2023. AeroFarms’ critical Danville, Virginia, farm continues to scale according to plan.

Prior to the filing, AeroFarms’ board of directors and executive leadership evaluated a range of strategic alternatives. With the protections afforded in the bankruptcy process, the company is working with its DIP lender investor group on a transaction to facilitate rapid emergence from Chapter 11. The company continues to explore other financing options so as to maximize the value of the company and recovery to creditors.

Along with the filing, the company also announced that co-founder and Chief Executive Officer David Rosenberg is stepping down from his CEO role; he will remain as a special advisor to the Board. Chief Financial Officer Guy Blanchard will assume the additional role of President of AeroFarms.

Blanchard will work closely with a Special Committee of the Board of Directors consisting of long-term AeroFarms independent board members Jim Borel and Peter Lacy to help guide the Company through the bankruptcy process. Borel has more than 45 years of industry experience as an executive at DuPont and as a member of the boards of several agriculture and food companies. Lacy is Global Sustainability Services Lead, Chief Responsibility Officer, and a Global Management Committee Member at the consulting firm Accenture.

“We are fortunate to have existing investors who continue to believe in AeroFarms and are confident that we can hit our targeted profitable operations for our Danville farm,” said Guy Blanchard, President and CFO of AeroFarms. “There is incredible consumer and customer interest for our market-leading microgreens, and we are excited to continue to be able to build our business to meet that demand.”

AeroFarms is represented by DLA Piper as counsel, Cloudpoint Capital as investment banker and ICR, Inc. as strategic communications advisor.

For more information about AeroFarms’ Chapter 11 case, contact the reorganization information hotline at 888-480-9117 (US & Canada toll free) and 747-263-0668 (International) or visit .

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