VeroBlue committee objects to disclosure statement amid investigation

By Caroline Salls

Pittsburgh, Jan. 10 – VeroBlue Farms USA, Inc.’s official committee of unsecured creditors objected to approval of the proposed disclosure statement for the company’s plan of reorganization, according to a Wednesday filing with the U.S. Bankruptcy Court for the Northern District of Iowa.

The committee said VeroBlue’s plan is “patently unconfirmable” and the disclosure statement lacks adequate information on several key aspects of the plan, meaning creditors will not have enough information to make an informed decision on whether to approve the plan.

“The infirmities in the disclosure statement and plan are substantial – if not completely overwhelming – and it is clear to the committee that proceeding to a confirmation hearing would be a complete waste of estate and the court’s resources,” the objection said.

“The deficiencies in the plan and disclosure statement are amplified in light of the extensive preliminary investigation undertaken by the committee of the conduct of the debtors, its senior secured creditors, officers, directors and equity holders.”

The creditor group said its ongoing investigation raises concerns that claims and causes of action may exist against some individuals and entities related to the VeroBlue cases, including challenges to the validity of secured claims filed against the company.

“The omission of these potential claims from disclosure in the disclosure statement, and the committee’s intention to investigate – and if appropriate, prosecute – such claims is glaring indeed,” the objection said.

“Moreover, the disclosure statement describes a plan that purports to grant full releases to most of the individuals and entities that are the target of the committee’s investigation; not only are these releases completely improper under the circumstances of this case, but stand to disenfranchise creditors if approved.”

VeroBlue Farms is based in Webster City, Iowa. It filed for bankruptcy on Sept. 21 under Chapter 11 case number 18-01297.

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