AppHarvest's three greenhouses were auctioned last week. In a single bid, the two largest farms in Morehead and Richmond were offered. Investment firm Equilibrium submitted the only bid—a $113 million credit bid—for these two 60-acre tomato-growing facilities, leading to the cancellation of the scheduled auction.
Bosch Growers, a Netherlands-based family-run grower in operation since 1854, submitted the winning bid on Thursday for AppHarvest's last remaining farm, a 30-acre cucumber and strawberry greenhouse in Somerset. Read more about the acquisition here.
Appharvest filed for Chapter 11 bankruptcy protection in July. After their greenhouse in Berea was transferred to its landlord and lease partner, the remaining farms were offered for sale in order to keep them operational and minimize disruption to employees.
Richmond and Morehead
Equilibrium, who acquired the Richmond and Morehead farms, has had a long-standing involvement with AppHarvest and played an active role during the bankruptcy proceedings.
One of Equilibrium's subsidiary companies loaned AppHarvest over $90 million to support the construction of the Richmond farm. In May, Equilibrium took legal action against AppHarvest, alleging that construction problems led to a breach of the loan agreement. When AppHarvest officially filed for bankruptcy in July, Equilibrium provided nearly $30 million in funding to keep their farms operational during the process. Additionally, Equilibrium acquired secured claims from another creditor related to the Morehead facility, giving them a financial stake in both the Richmond and Morehead farms.
Objecting the sales
Several AppHarvest suppliers are objecting the sales. Dutch greenhouse building company Dalsem, builder of the Morehead and Richmond facilities, argues the sales should not be approved, because it would result in creditors’ outstanding invoices not being paid.
Another party objecting to the approval of the sale is Aweta, a Dutch supplier whose sorting machine is at the Richmond facility, but installation and payment hasn't been completed. They request payment of the final 10% of the purchase price and freight charges. They state, "While AWETA does not oppose the Debtors' overall proposal to sell their assets and liquidate, it is axiomatic that a debtor cannot sell something it does not own."
An objection against the Somerset sale was filed by Walker, a company that provided construction and related services. They seek more security in full payment of their mechanics' lien as they are concerned that the motion and related documents lack clarity about how this will be done.
The results of the auctions are pending court approval, which is scheduled for September 7th.