July 17, 2013
US AgFeed Industries files for bankruptcy
According to documents filed with the Securities and Exchange Commission (SEC) and the US Bankruptcy Court in Wilmington, Delaware, AgFeed Industries, Inc. filed for Chapter 11 bankruptcy protection.
The company already has agreed to sell most of its US businesses to Maschoffs LLC for US$79 million. Carlyle, Ill.-based Maschoffs is one of the largest family owned pork production networks in North America with more than 400 family farms in the Midwest, according to the company's web site. AgFeed will continue working to sell its remaining US operations and its holdings in China which are not part of the bankruptcy proceedings.
"The company and AgFeed USA, with the assistance of their financial advisers, Business Development Asia LLC and BDA Advisors Inc., are continuing to actively pursue competing offers for AgFeed USA, sales of the company's Chinese subsidiaries and assets as well as the Sellers' remaining assets, primarily comprised of sellers' sow farm operations in Oklahoma," the company stated in its 8-K filing with the SEC.
AgFeed also has ended its supply contract with Hormel Foods, Inc. following a dispute that resulted in an arbitration award of US$7.9 million against AgFeed in early 2013. Court documents stated that in 2012, the company supplied more than 1.3 million hogs to Hormel facilities in Austin, Minn. and Fremont, Neb.
In September 2011, AgFeed Industries' board of directors launched an investigation into the accounting relating to certain company Chinese farm assets used in its hog production business, as well as the validity and collectability of certain of the company's accounts receivables relating to its animal nutrition business in China.
AgFeed Industries is an international agribusiness with operations in the US and China. It has two business lines: animal nutrition in premix, concentrates and complete feeds and hog production. AgFeed's hog production unit in the US is Mini-Magnetospheric Plasma Propulsion (M2P2).