(Corrects share price in fifth paragraph of story published yesterday.)
The Chapter 11 petition filed in Wilmington, Delaware, today listed as much as $500 million in assets and debt as high as $100 million. The company had a disagreement with Hormel, which led to arbitration and a default under one of its loan agreements, according to the filing. Also filing was parent AgFeed Industries Inc.
“A sale of all or substantially all of the assets of AgFeed USA” is the best way to reorganize, and the company already has an offer for $79 million, Chief Restructuring Officer Keith Maib said in court papers. It plans to hold an auction to test for higher offers in bankruptcy.
AgFeed operates through units in China and the British Virgin Islands and has 21 commercial farms and five feed mills that produce more than a quarter-million hogs a year, according to the filing.
AgFeed Industries rose 2 cents to 7 cents today in over-the-counter trading, compared with an all-time high of $20.94 in May 2008.
The case is In re AgFeed USA, 13-bk-11761, U.S. Bankruptcy Court, District of Delaware (Wilmington).