AgFeed to settle $2 million reimbursement claim with $300,000 payment

By Kali Hays

New York, Oct. 27 – AgFeed USA, LLC obtained court approval of a settlement agreement with Good Charm International Development, Ltd. and Ningbo Tech-Bank Co. Ltd. resolving litigation related to a stock sale, according to an Oct. 27 order from the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, Good Charm is an affiliate of Ningbo and was the prevailing bidder for the sale of all AgFeed Industries, Inc. (British Virgin Islands) stock with a purchase price of $50.5 million.

After the sale closed in December 2013, Good Charm submitted a calculation of a post-closing adjustment in excess of $2 million and said that it was further entitled to reimbursement for professional fees related to the sale transaction, according a motion.

AgFeed rejected the proposed adjustment and reimbursement claiming it was incorrect, untimely and calculated using improper methods.

In July, AgFeed asked the court to issue an order enforcing the closure of the stock sale and demanding the release of $582,432 held in escrow by Good Charm.

As a result of negotiations between the parties since July, AgFeed agreed to pay Good Charm $300,000 from the held escrow amount, which will be considered a full settlement of Good Charm’s post-closing adjustment.

Both parties also agreed to withdraw all pending litigation and claims against one another.

AgFeed USA, an Ames, Iowa-based producer of animal feed, filed for bankruptcy on July 15, 2013. Its Chapter 11 case number is 13-11761.

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