AeroFarms, an indoor agriculture company that sells its sustainably grown leafy greens in chains such as Whole Foods Market, Harris Teeter and Amazon Fresh, is seeking bankruptcy protection.
Citing “significant industry and capital market headwinds” within the vertical farming industry, the Newark-headquartered company announced June 8 that it filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.
While the process plays out, the company said it’ll operate as usual, servicing its customer base and key selling partners, and expects additional retailer expansions to move forward as planned.
According to AeroFarms, a group of existing investors will provide $10 million in debtor-in-possession financing, which, along with cash from ongoing operations, is expected to keep the company operating while it restructures.
AeroFarms is also working with the DIP lender investor group “on a transaction to enable it to quickly emerge from Chapter 11” and will “continue to explore other financing options as to maximize the value of the company and recovery to creditors,” according to a statement.
Coinciding with the filing, David Rosenberg, co-founder and chief executive officer, stepped down from his leadership role and will instead serve as a special advisor to the board. Chief Financial Officer Guy Blanchard will take the helm of the 19-year-old company, AeroFarms said.
The bankruptcy comes two months after AeroFarms announced that 82 workers in Newark would lose their jobs as part of a plan to transfer production to its commercial farm in Danville, Va., as a way to better meet consumer demand.
Known for its ready-to-eat, pesticide-free specialty greens, AeroFarms has deals with several major retailers as well as multiyear strategic partnerships with entities ranging from government agencies to major Fortune 500 companies to solve agriculture supply chain needs.
In Thursday’s statement, AeroFarms said its “critical” farm in Danville “continues to scale” according to plan.
Blanchard said in a statement, “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. There is incredible consumer and customer interest for our market-leading microgreens, and we are excited to continue be able to build our business to meet that demand.”