CalPlant files Chapter 11 bankruptcy to implement restructuring, sale

By Sarah Lizee

Olympia, Wash., Oct. 5 – CalPlant I, LLC and CalPlant I Holdco, LLC filed Chapter 11 bankruptcy on Tuesday in the U.S. Bankruptcy Court for the District of Delaware, according to a press release.

CalPlant said it has entered into a plan support agreement with its senior bondholders and is pursuing a sale of the company.

The agreement provides for a comprehensive financial restructuring of the company's debt and the investment resources to complete the commissioning of the company’s manufacturing facility, and first ever rice straw-based MDF.

The company said it will continue to operate in the normal course without disruption to its vendors, customers, or employees, and will have enough liquidity to meet its financial obligations throughout the restructuring process.

“The road to fully commissioning our plant has not been smooth. We started commissioning our facility in early March 2020, then the pandemic hit,” Jeffrey Wagner, CalPlant's executive chairman, said in the release.

“Suddenly, the usual challenges and delays associated with a startup were compounded with navigating a startup using first-of-its-kind technology during a global pandemic.”

DIP financing

The company has secured commitments for up to $30.1 million in debtor-in-possession financing in the form of new taxable bonds from some of its senior bondholders to support the business during the Chapter 11 process.

The bonds consist of a $7.2 million issuance following entry into an interim order, with the remaining $22.9 million to be issued following a final order.

The interim and final DIP orders will provide for a deemed roll-up of the $4.1 million of pre-petition advances by the senior trustee, with half of the roll-up being paid upon entry into the interim order, and the remaining amount being paid upon entry into the final order.

BOKF, NA is the DIP trustee.

Interest will be 9½%, payable monthly. The default rate would be an incremental 2%.

BOKF will receive $40,000 in settlement fees and an annual $6,000 fee.

The bonds are set to mature in one year.

Other details

CalPlant listed $100 million to $500 million in both assets and liabilities.

Its largest unsecured creditor is Siempelkamp Maschinen, based in Krefeld, Germany, with a $2.66 million equipment supplier claim.

The company is being advised by Morrison & Foerster LLP as restructuring counsel, and Paladin as financial adviser and investment banker.

Willows, Calif.-based CalPlant manufactures sustainably-sourced building products. The Chapter 11 case number is 21-11302.

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