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  1. #1
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    Default Groeb Farms Goes Bankrupt

    An article in the Wall Street Journal tells of their 27 million dollar debt to suppliers domestic and foreign.

    Maybe Rader could find a link to the article?

    http://www.businessweek.com/articles...for-bankruptcy
    Last edited by Barry; 10-07-2013 at 06:42 AM. Reason: add link
    Mark Berninghausen #youmatter

  2. #2
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    Default Re: Groeb Farms Goes Bankrupt

    Not to step on Rader's toes, but I saw it here:
    http://online.wsj.com/article/SB1000...351841650.html

  3. #3
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    Default Re: Groeb Farms Goes Bankrupt

    On their website:

    "Worldwide leadership in honey processing and best-in-class producer of wholesome food ingredients, industrial sweeteners, food service products, and value-added retail products."

    "best-in-class producer", I guess they're claiming to be the best in honey laundering?

    "value-added", Chinese honey?
    Regards, Barry

  4. #4
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    Default Re: Groeb Farms Goes Bankrupt

    This bankruptcy isn't necessarily goring to take Groeb Farms out of the market. Here is a press release they put out:
    Groeb Farms, Inc. Announces Recapitalization And Reorganization Plan

    Normal Business Operations to Continue Under Chapter 11 Process


    http://www.prnewswire.com/news-relea...226028471.html
    Note the words above in the headline, "Normal operations to Continue", and then there is this gem in the text:
    The bankruptcy is based on a prepackaged reorganization that releases the company from its legacy liabilities, allowing us to emerge as a strong, well-capitalized company, under new ownership, with a continued commitment to world class products and services, customer satisfaction and supply chain integrity."
    "continued supply chain integrity"?

    Graham
    USDA Zone 7A Elevation 1400 ft

  5. #5
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    Default Re: Groeb Farms Goes Bankrupt

    That is common in Chapter 11. "normal operations to continue". The trick is if they can exit Chap 11 or a Trustee decides to liquidate the operation. If you are a creditor, you might get 10 cents on the dollar. Once, I was ordered by a Trustee to return payments I had received from the debtor in a Chap 11. That really sucks. WORLDCOM still owes me more money from their bankruptcy and I had to write off a lot. It really p****ed me off.

  6. #6
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    Default Re: Groeb Farms Goes Bankrupt

    If you read the press release, it also says this is a "pre-packaged" bankruptcy. That generally means that everybody that counts is "onboard" and the whole thing is not likely to be stopped.
    Graham
    USDA Zone 7A Elevation 1400 ft

  7. #7
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    Default Re: Groeb Farms Goes Bankrupt

    Quote Originally Posted by matt1954 View Post
    WORLDCOM still owes me more money from their bankruptcy and I had to write off a lot. It really p****ed me off.
    Yeah, and GM owes me a lot when they washed their hands of us little guys. I'll never buy a GM vehicle again!!

    -sorry about the sidetrack......
    Horseshoe Point Honey -- http://localvahoney.com/

  8. #8
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    Default Re: Groeb Farms Goes Bankrupt

    Quote Originally Posted by Rader Sidetrack View Post
    If you read the press release, it also says this is a "pre-packaged" bankruptcy. That generally means that everybody that counts is "onboard" and the whole thing is not likely to be stopped.
    Not true. A pre-packaged bankruptcy usually means that the Petition, Schedules, Plan, and Disclosure Statement are all filed at one time. Otherwise, the Petition would be filed, two weeks later the schedules, a few months later the Plan and Disclosure Statement. It's an attempt to get out of Chapter 11 faster.

    Just because they filed everything together in no way means it "is not likely to be stopped." Creditors still have to vote on the plan. The judge still has to approve the plan as "fair."

  9. #9
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    Default Re: Groeb Farms Goes Bankrupt

    More on the topic of prepackaged Chapter 11 bankruptcies.
    A prepack can have significant advantages over either a traditional chapter 11 case or an out-of-court restructuring, especially for a company that does not need to repair operational problems with the extended use of bankruptcy tools. Unlike a restructuring that takes place fully-out-of-court, a prepack allows a company to minimize the leverage of holdouts and to reach and effectuate an arrangement that satisfies the majority of creditors. Unlike an ordinary chapter 11 case (in which the debtor files, obtains approval of its disclosure statement, solicits votes, and seeks to have the plan confirmed), a company in a prepackaged chapter 11 case does much of the work before entering the bankruptcy system. It negotiates and solicits votes on a plan, then files for bankruptcy with the potentially confirmable plan in hand. This enables the debtor to confirm a plan and emerge from bankruptcy within a few months or less.

    More at the link:

    http://www.abiworld.org/AM/Template.cfm?Section=Working_Group_Proposals&Templ ate=/CM/ContentDisplay.cfm&ContentID=36465


    Graham
    USDA Zone 7A Elevation 1400 ft

  10. #10
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    Default Re: Groeb Farms Goes Bankrupt

    Every chapter 11 negotiates and solicits votes in a plan. Most attempt to do this prior to filing bankruptcy. That does not mean it's a "done deal" or that all creditors are already on board. Nothing in that quote said that everyone in a pre-packaged bk is onboard. Nothing in that quote said that creditors did not have to vote on the plan, or that the judge didn't have to approve it.

    Thank you for informing a Chapter 11 Bankruptcy Attorney on how it works by searching the internet Rader.

  11. #11
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    Default Re: Groeb Farms Goes Bankrupt

    The quote I linked to above was provided by the American Bankruptcy Institute which says they are:

    The American Bankruptcy Institute is the largest multi-disciplinary, non-partisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABImembership includes more than 13,000 attorneys, auctioneers, bankers, judges, lenders, professors, turnaround specialists, accountants and other bankruptcy professionals providing a forum for the exchange of ideas and information. In fulfillment of its mission to provide information to its members, journalists, Congress and the public, ABI is engaged in numerous educational and research activities, as well as the production of a number of publications both for the insolvency practitioner and the public.


    http://www.abiworld.org/AM/Template....tion=About_ABI
    If you are not a member of the ABI, perhaps you should be.

    My comments included the qualifiers "LIKELY" and "GENERALLY", and are of course, my opinion.

    Everyone reading this, including any and all attorneys, are welcome to provide their own differing opinion. Perhaps your opinion might have more credibility if you provided a link to support your opinion.

    A link to statistics showing the percentage of prepackaged Chapter 11 plans that are approved without substantial changes vs non-approved would be a good start, in my opinion.

    .
    Last edited by Rader Sidetrack; 10-09-2013 at 06:33 AM.
    Graham
    USDA Zone 7A Elevation 1400 ft

  12. #12
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    Default Re: Groeb Farms Goes Bankrupt

    Apparently their bad business practices extended well beyond importing fake honey. If you end up needing forgiveness of 27 million dollars when you are selling sugar water and cheap laundered honey as real honey then you have a big problem at the core of the business. The 2 million dollar fine was a tiny slap on the wrist and didn't even seem to be as much as they benefited from the criminal activity.

    I would be very hesitant selling them any honey in the future... If you don't get paid in cash up front you become a creditor and if the 'reorganization' doesn't work you could end up one of those being paid 10 cents on the dollar.

  13. #13
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    Default Re: Groeb Farms Goes Bankrupt

    Over the past several weeks since Groeb filed for bankruptcy I have been getting letters and documents from the lawyers handling the case. Has everyone else been getting these also? Today was a ballot voting to approve/disapprove the reorganization plan.

  14. #14

    Default Re: Groeb Farms Goes Bankrupt

    Quote Originally Posted by coopermaple View Post
    Has everyone else been getting these also?
    Yeah...my mailbox has been busy with them. As I've never done business with them in any way, I don't pay any attention to it...haven't even opened the letters.
    Dan www.boogerhillbee.com
    Experience is a hard teacher because she gives the test first, the lesson afterwards

  15. #15
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    Default Re: Groeb Farms Goes Bankrupt

    Those who didn't get letters may be interested in this article published Nov 11 summarizing the Groeb bankruptcy situation:
    http://www.nasdaq.com/article/judge-...20131111-00773

    Some highlights from the link:
    The bankruptcy-exit plan would enable three private equity firms that extended another $7 million to remain the company's lenders but with new terms that weren't disclosed in court papers. Unsecured creditors would recover 10% of the amount they are owed, and the company's current owners--mostly individual investors--would be wiped out.

    The company filed for Chapter 11 protection on Oct. 1, blaming financial troubles that hit after Groeb Farms was accused of buying Chinese honey through other countries to avoid antidumping tariffs imposed by U.S. trade regulators in 2001. The bankruptcy filing halted several lawsuits filed earlier this year by honey producers and distributors that said they were harmed in the scandal.
    The company, based in Onsted, Mich., operates a second processing plant in San Bernardino, Calif., and a testing lab in Belleview, Fla. It also owns the Miller's American Honey retail brand , which it purchased in 2010 for about $16 million, according to court papers.
    According to the article, there will be a hearing December 19th to review the results of the creditor ballot.
    Graham
    USDA Zone 7A Elevation 1400 ft

  16. #16
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    Lima, Ohio, USA
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    Default Re: Groeb Farms Goes Bankrupt

    I've been getting the letters and have never done business with them either. They seem to be casting a wide net just in case. They have listed every possible debt including many that are less than $100. They'll spend more discharging many of the debt than what the amount is.

    I do fee sorry for the beekeepers and small businesses on the list that will end up paying for Groeb Farms mistakes and illegal activity.

  17. #17
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    Default Re: Groeb Farms Goes Bankrupt

    Quote Originally Posted by Rader Sidetrack View Post
    there will be a hearing December 19th to review the results of the creditor ballot.
    It's called a confirmation hearing.

  18. #18
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    Default Re: Groeb Farms Goes Bankrupt

    I sent in my ballot today. Can't say I'm in favor of seeing them continue. Looks like the little guys aren't going to get back much if anything. Feel a bad for them but I don't see any point in supporting a company that bought that much Chinese honey.

  19. #19
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    Default Re: Groeb Farms Goes Bankrupt

    Quote Originally Posted by Specialkayme View Post
    It's called a confirmation hearing.
    Thanks for the technical clarification.

    Any bets on whether this pre-packaged bankruptcy plan will be approved without substantial changes?
    Graham
    USDA Zone 7A Elevation 1400 ft

  20. #20
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    Default Re: Groeb Farms Goes Bankrupt

    That depends on two things:
    1. Will 2/3 of the dollar amount AND 51% of the number of unsecured ballots cast be rejecting the plan?
    2. What do you consider "substantial"?

    If the answer to 1 is no, then the Plan likely won't change (absent some secured creditor wanting a slightly higher payment). If the answer to 1 is yes, the Plan may change slightly, likely based on the Absolute Priority Rule, requiring new investors to infuse capital to flow to 1) administrative expenses and operational expenses, and 2) unsecured creditors.

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