(Reuters) - Minnesota-based organic food and feed supplier Pipeline Foods LLC on Thursday secured approval to move forward on a fast-tracked auction and sale of certain property in Iowa and to work with junior creditors to sell off the rest of its assets.
U.S. Bankruptcy Judge Karen Owens in Wilmington, Delaware signed off on the sale procedures during a brief, virtual hearing. Pipeline, represented by Saul Ewing Arnstein & Lehr, filed for bankruptcy protection in July with $143.7 million in debt, blaming the economic impact of the COVID-19 pandemic for its trouble.
Owens also approved The Scoular Company as the lead bidder for Pipeline’s Atlantic, Iowa-based real estate and storage facility. Scoular has offered $4.35 million for the property.
Competing bids are due on Oct. 21. If additional bids are made, an auction will occur on Oct. 22. A sale hearing is set for Oct. 28.
Pipeline attorney Monique DiSabatino told Owens during the hearing that the company is working with its unsecured creditors’ committee on a joint Chapter 11 liquidation plan. Top-ranking, administrative creditors may not be paid in full.
Owens said she is “very happy” the company and creditors have agreed on a path to wrap up the bankruptcy.
“We’re really now at the most critical part of the whole case,” she said.
The case is In re Pipeline Foods LLC, U.S. Bankruptcy Court, District of Delaware, No. 21-11002.
For Pipeline: Monique DiSabatino, Michael Gesas, Mark Minuti, John Demmy, Matthew Milana, Barry Chatz, David Golin and Andrew Rudolph of Saul Ewing Arnstein & Lehr
For the unsecured creditors' committee: Kevin Collins and Connie Lahn of Barnes & Thornburg
Our Standards: The Thomson Reuters Trust Principles.