Former AeroFarms closes sale of assets to investor group

By Sarah Lizee

Olympia, Wash., Sept. 18 – AF Liquidation, Inc., formerly AeroFarms, Inc., closed the sale of its assets on Friday to stalking horse bidder 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 GmbH, according to a press release.

Molly Montgomery, a venture partner with Grosvenor, has been appointed acting chief executive officer and executive chairperson of the AeroFarms board of directors. She currently serves as a board director for companies across the agricultural supply chain, including Wilbur-Ellis, the Wine Group, Custom Made Meals and Benson Hill.

The U.S. Bankruptcy Court for the District of Delaware approved the sale last month, as previously reported.

Under the stalking horse bid, AF NewCo agreed to buy the asset through a credit bid of all debt under a $10 million debtor-in-possession facility, plus $500,000 in cash and assumed liabilities, including amounts under a venture loan facility.

The hearing on AF Liquidation’s Chapter 11 plan and disclosure statement is scheduled for Oct. 24. The company secured conditional approval of the documents for solicitation purposes on Thursday.

Under the plan, a liquidation trust will fund distributions with cash held on the effective date by or for the benefit of the debtors.

Holders of prepetition secured claims, tranche A DIP claims, tranche B DIP claims and NMTC parties secured claims will receive full recovery.

Other secured claims and other priority claims will be unimpaired.

Holders of DVC noteholder claims, 2022 noteholder claims and general unsecured claims will receive cash in an amount of their pro rata share among all holders of general unsecured claims of a distribution fund. If a holder in any of these classes votes to accept the plan, they will be deemed a released party.

Holders of intercompany claims, intercompany interests and interests in AeroFarms will receive no distribution.

The indoor vertical farming company is based in Newark, N.J. It filed bankruptcy on June 8 under Chapter 11 case number 23-10737.

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