Prima Wawona files Chapter 11 bankruptcy with over $1 billion in debt

By Sarah Lizee

Olympia, Wash., Oct. 13 – MVK FarmCo LLC, which does business as Prima Wawona, filed Chapter 11 bankruptcy Friday in the U.S. Bankruptcy Court for the District of Delaware and is transitioning ownership of the company and recapitalizing the business, according to a press release.

In connection with an agreement reached among the company's lenders, Prima Wawona is proceeding with a transaction that will involve either the conversion of existing lender debt into equity ownership of the business or allow for a sale transaction to a third-party buyer.

The ownership transition is expected to allow for the continued operation and long-term sustainability of the business.

The company’s prepetition outstanding debt totals $679 million and includes a $292.19 million PropCo facility due 2026, a $245.54 million OpCo term facility due 2026, a $35.99 million OpCo revolver due 2024, and a bridge facility that includes $23.49 million in new money bridge loans and $81.5 million in bridge rollup loans.

“Over the last several years, Prima Wawona has grown tremendously. We recently completed the 2023 harvest season, during which our team grew, packed and delivered more fruit across more acres than ever before,” John Boken, Prima Wawona’s chief executive officer, said in the release.

“At the same time, the business has faced significant headwinds, including increased costs and weather-related impacts, that have combined to make our existing capital structure unsustainable.”

The company's prepetition lenders have retained ACM Management Co., LLC to advise them as to a potential ownership transition.

The prepetition lenders have consented to the use of cash collateral to support the ordinary course operations of the business and to fund the administration of the sale process and the Chapter 11 cases.

The company has filed a number of customary motions seeking court approval to continue to support its operations during the court-supervised process, including the continued payment of employee wages and benefits without interruption.

Prima Wawona said it intends to pay vendors in full under normal terms for goods and services provided on or after the filing date.

In its petition, the company listed 1,000 to 5,000 creditors, $500 million to $1 billion in assets and $1 billion to $10 billion in liabilities.

Its largest unsecured creditors are McKinsey & Co., Inc., based in Philadelphia, with a $8.04 million trade payable claim, Georgia-Pacific Financial Management LLC, based in Los Angeles, with a $3.92 million trade payable claim, Brifo Land LLC, based in Littleton, Colo., with a $2.67 million landlord claim, and Veritiv Operating Co., based in Los Angeles, with a $1.36 million trade payable claim.

Kirkland & Ellis LLP and Young Conaway Stargatt & Taylor, LLP are serving as the company's legal counsel. Houlihan Lokey Capital, Inc. is serving as the company's investment banker. AP Services, LLC is serving as its interim management and restructuring adviser.

Prima Wawona is Fresno, Calif.-based producer of stone fruit. The Chapter 11 case number is 23-11721.

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