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After filing for Chapter 11 bankruptcy protection in June, Newark-based AeroFarms – whose sustainably grown leafy greens can be found in major chains like Whole Foods Markets and Harris Teeter – is pursuing a sale of its nearly 20-year-old business.

The vertical farming company wants to conduct an auction to sell company assets under Section 363 of the U.S. Bankruptcy Code while continuing day-to-day business operations, Aerofarms disclosed in a July 11 supplement filed in United States Bankruptcy Court for the District of Delaware.

According to the document, AeroFarms signed an asset purchase agreement with AF NewCo Inc., a newly formed entity owned by a group of existing investors, including Grosvenor Food & AgTech, INGKA Investments Ventures US BV, Cibus Fund and ACEG Beteiligungsgesellschaft mbH. Under the terms of the APA, AF NewCo will act as stalking horse bidder to acquire the company’s assets.

AF NewCo also provided a debtor-in-possession loan of $10 million, which it will be credit bidding, AeroFarms said in a July 13 update.

While the bidding procedures and auction timeline are subject to approval by the bankruptcy court, AeroFarms hopes to “promptly” sell its assets “to provide better clarity” on the venture’s future. The company said it will seek entry of an order confirming the results of the 363 sale on or before Aug. 22.

Announcing its June 8 bankruptcy filing, AeroFarms said it would operate as normal, servicing its customer base and key selling partners, and anticipating additional retailer expansions to move forward as planned. At that time, it also entered an arrangement to secure liquidity from some previous investors to provide $10 million in DIP financing, which, along with cash from ongoing operations, was expected to keep the business running while it restructures. Simultaneously, AeroFarms said its board of directors would “continue to explore other financing options as to maximize the value of the company and recovery to creditors,” according to a statement.

Alongside its July 13 update on the business’s financial and operational restructuring, AeroFarms highlighted the expanded retail availability of its microgreens at Walmart locations in the Mid-Atlantic and Stop & Shop supermarkets in the Northeast.

Guy Blanchard, president of AeroFarms, issued a statement saying, “We are excited by the growing customer demand for our market leading microgreens and to be expanding our retail presence and look forward to emerging stronger and better positioned to prosper into the future. We will continue to work in close cooperation with all of our stakeholders to conduct our financial and operational restructuring, which will position us for long-term success.”

Previously AeroFarms’ chief financial officer, Blanchard took the helm of the company last month after co-founder and CEO David Rosenberg stepped down from his leadership role to serve as a special advisor to the board.

In recent years, billions of dollars have been put into vertical farming ventures to help produce and distribute fresh food closer to urban markets. Now faced with a pullback in venture capital funding, the already costly venture of indoor vertical farming is starting to experience growing pains.

The industry’s challenges – which include high energy costs, technological limitations and the ability to scale production to keep expenses down – has made it tough for these companies to achieve true sustainability, both environmentally and financially.

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.

AeroFarms has made moves over the past year to expand into the Middle East as part of a goal to create sustainable opportunities to further next generation agriculture in arid and desert environments.