Country Fresh plans for reorganization
The Woodlands, Texas-based Country Fresh, a fresh-cut fruit, vegetable, and snacking solutions provider, filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas.
The action was taken in order to effectuate the upcoming sale of the company, according to a news release. The sale includes all Country Fresh brands, including SunRich and Tiffany Gate.
“Pandemic-related supply chain and business disruptions have affected Country Fresh and our customers dramatically over the past year,” Bill Andersen, Country Fresh president and CEO, said in a Feb. 16 release. “Despite efforts to improve company results before and during COVID, we believe that this sale transaction will result in a better capitalized company and positions our customers, suppliers, employees, and all other stakeholders for maximum success going forward.”
The auction itself and resulting transaction is expected to close within 60 days, according to the release. Additional information regarding Country Fresh’s Chapter 11 filing is available at https://dm.epiq11.com/countryfresh, according to the company.
On Feb. 17, Country Fresh Holding LP also announced that its Canadian subsidiaries, Sun Rich Fresh Foods Inc., Tiffany Gate Foods Inc. and TGF Acquisition Parent Ltd. have filed for protection under the Companies’ Creditors Arrangement Act (Canada) pursuant to an order of the Ontario Superior Court of Justice.
The CCAA filing follows an earlier filing by the company’s U.S. affiliates under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas. The U.S. and Canadian proceedings will operate as parallel main proceedings, with the common goal of facilitating a court-supervised solicitation and sales process in respect of the assets of the company, according to the release.
“It is our goal to position our customers, suppliers, employees and other stakeholders for success,” Anderson said in the release. “The filing in Canada is the next step in our reorganization plan and continues the process we initiated in Texas to move the planned sale forward. This restructuring signifies the beginning of the next chapter for Country Fresh and we are looking forward to the bright future ahead.”
The company said in the release it has entered into a binding stalking horse asset purchase agreement with certain affiliates of global private equity firm, Stellex Capital Management, subject to potential overbids obtained pursuant to the sales process, according to the release. Country Fresh intends for the sales process and resulting transaction to close within 60 days, according to the release.
Pursuant to the initial order of the Canadian Court, an initial 10-day stay of proceedings has been issued in Canada, subject to further extensions by the Canadian Court. Ernst & Young Inc. has been appointed as Monitor in the Canadian proceedings, the release said.
The company said it has ensured that sufficient funding is in place for its manufacturing and distribution facilities in the U.S. and Canada to continue operating in the ordinary course during the court-ordered stay of proceedings, as the company delivers meal kits, cut fresh fruit and vegetable trays, and containers to a wide range of retailers and foodservice customers across the U.S. and Canada while the sales process remains ongoing.
A copy of the initial order and more information about the Canadian CCAA proceedings will be available on the Monitor’s website at: www.ey.com/ca/freshfoodcanada.
