Do Good Foods gets approval of DIP financing, bid procedures

By Sarah Lizee

Olympia, Wash., July 21 – KDC Agribusiness LLC, which does business as Do Good Foods, secured approval of $30 million in debtor-in-possession financing and approval of bid procedures for its assets, according to orders filed Thursday with the U.S. Bankruptcy Court for the District of Delaware.

UMB Bank, NA is the DIP agent. The lenders are Nuveen Asset Management, LLC and AllianceBernstein LP, on behalf of certain funds and accounts.

Interest is 12% per annum. Default interest would rise to 14%.

There is a 4% upfront fee and a 4% exit fee.

The facility has a 91-day maturity.

As background, the company said that even with access to the DIP facility, its current financial condition will not allow for administration of the Chapter 11 case and marketing process for its assets for an extended period.

As such, the debtor and secured parties under the DIP facility have agreed to pursue a potential sale transaction on an expedited timeline.

The company gained approval on July 20 to designate a stalking horse bidder and provide up to 4.5% in bid protections.

Any competing bid must be for all of the debtors’ assets and must be paid in full in cash and exceed the sum of $35 million, cure costs of all assumed contracts, any transfer taxes resulting from the sale, unless the DIP secured parties have agreed otherwise, the amount of the remaining unpaid DIP obligations, the bid protections, if any, and, if a stalking horse bidder has been designated, the $2 million minimum overbid.

However, bidders can also propose an alternative transaction that provides higher or better terms, provided that the alternative transaction must, at a minimum, provide for the immediate cash repayment in full of the DIP obligations and the bid protections.

Under the bid procedures, the bid deadline is 4 p.m. ET on Sept. 8, an auction is scheduled for Sept. 12, and a sale hearing is set for Sept. 18.

KDC Agribusiness is a food waste recycling company based in Bedminster, N.J. The company filed bankruptcy on June 14 under Chapter 11 case number 23-10786.

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