GenCanna Global USA consents to voluntary Chapter 11 bankruptcy

By Caroline Salls

Pittsburgh, Feb. 6 – GenCanna Global USA, Inc. filed Chapter 11 bankruptcy on Thursday in the U.S. Bankruptcy Court for the Eastern District of Kentucky, according to a news release.

Pinnacle, Inc., Crawford Sales, Inc. and Integrity / Architecture PLLC filed an involuntary Chapter 11 case against GenCanna on Jan. 24. The company elected to file a voluntary petition on Thursday.

GenCanna said the filing will allow it to continue to operate its business without interruption to customers, vendors, partners and employees while working through a reorganization plan that could include refinancing of the company’s existing debt or an alternative restructuring transaction such as a sale.

In conjunction with the filing, the company obtained a commitment for $10 million in debtor-in-possession financing from its senior lender, which, subject to court approval, will provide liquidity to maintain GenCanna’s operations in the ordinary course of business during the Chapter 11 process.

“We are taking this action in order to position our business for success in a highly dynamic and rapidly evolving industry,” chief executive officer Matty Mangone Miranda said in the release.

“While this is certainly not the outcome we desired, the bankruptcy process gives us the ability to move forward in a way that allows us to best continue operations and serve customers as we work through our reorganization, resolve an outstanding legal dispute involving our Western Kentucky facility, navigate an uncertain regulatory environment and adjust our annual operating costs to better match the landscape.

“Through this restructuring, we plan to address certain structural issues that we could not fix on our own.”

Although no specific asset and debt ranges were provided, GenCanna said in court documents that $68.5 million of a $75 million pre-bankruptcy credit facility was outstanding as of Jan. 31.

Huron Consulting Services LLC is serving as operational adviser, Jefferies LLC is serving as financial adviser and Benesch Friedlander Coplan & Aronoff LLP along with Dentons Bingham Greenebaum LLP is serving as the company’s legal counsel in connection with the Chapter 11 case.

Winchester, Ky.-based GenCanna is a vertically integrated agriculture-technology company specializing in the production of hemp rich in CBD. The Chapter 11 case number is 20-50133.

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