Millenkamp Cattle files Chapter 11 bankruptcy, blames Rabo, MetLife

By Sarah Lizee

Olympia, Wash., April 12 – Millenkamp Cattle, Inc. filed Chapter 11 bankruptcy on April 2 in the U.S. Bankruptcy Court for the District of Idaho.

The company said the issues that led to the filing were not based on the operations or financial issues of the debtors but were brought on by lenders refusing to work cooperatively with each other and the debtors.

The cattle company said in court documents that its capital structure includes a $91 million revolving loan agreement dated 2021, a $7.5 million swingline credit facility and $1 million letter-of-credit facility with Rabo AgriFinance LLC.

The company also has about $180.47 million in loans with Metropolitan Life Insurance Co. and MetLife Real Estate Lending LLC.

In 2019, Millenkamp started building a $250 million dairy expansion, to be funded by Rabo and MetLife. Construction was completed in 2021.

The company said the deal between Millenkamp, Rabo and MetLife was to complete the construction project, reappraise the property after its completion and use the large equity cushion Millenkamp maintained in the property to pay down the Rabo revolver.

Millenkamp said that Rabo changed its borrowing base margin to $10 million from zero, which created a hurdle as the project was in its final phases of construction.

Rabo started issuing notices of default in June 2022 but entered into a forbearance agreement with the company.

The company said that in 2023 it attempted to refinance the revolver with two unnamed banks, who required that MetLife provide about $45 million in additional funding. MetLife declined to do so.

Millenkamp said that Rabo has also swept over $25 million in steer and cull cow proceeds since August 2023.

“The inability of Millenkamp Cattle to use the swept steer and cull cow proceeds slowly starved Millenkamp Cattle of the working capital it needed to keep vendors paid on a timely basis,” the company said in court documents.

“This was a deliberate action of Rabo to squeeze Millenkamp Cattle and its vendors out of working capital and eventually force the Chapter 11 filings.”

A receiver was appointed to the company in January following a petition by Rabo. The order provided that the company had the exclusive right to make a Chapter 11 filing during the first 60 days of the order.

Millenkamp said the receiver “continually stirred the pot” with the goal of quickly selling the company under an expedited 363 sale.

DIP financing, cash collateral

The company is currently seeking final approval of a $35 million debtor-in-possession revolver with Sandton Capital Partners LP as lender. The facility would mature in nine months and bear interest at 15% per annum, payable in kind. There is a 2.5% exit fee, a 2.5% issuance fee, a 2.5% unused fee and a 2.5% renewal fee.

The company is also seeking approval to access the cash collateral that Rabobank, MetLife and others have an interest in.

A hearing on the DIP financing and cash collateral use is scheduled for Tuesday.

Rabo response

In an objection to the DIP financing and cash collateral use, Rabo said it has given the company 22 months since the prepetition revolver matured to provide a refinancing.

“When the debtors were unable to put forth a solution of their own, [Rabo] made numerous proposals to de-lever the debtors’ balance sheet, some of which included new money funding,” the lender said.

Rabo said the company rejected its offers, and in some cases didn’t respond at all.

The lender said the DIP financing the company is now seeking doesn’t protect its interests, and instead seeks to deeply subordinate its interests and rights.

“[Rabo] remains committed and willing to continue to contribute to a Chapter 11 process that maximizes value for all stakeholders,” the bank said.

“However, the [revolver] is approaching the two-year anniversary of the expiration of the maturity date without the debtors provided a viable turnaround plan for repaying the lenders during that time.”

Rabo added that use of its cash collateral should be conditioned on “narrowly tailored” protections.

Other details

In its petition, the company reported $643 million in assets and $339 million in liabilities.

Its largest unsecured creditors are Metropolitan Life Insurance, based in Overland Park, Kan., with a $30.47 million claim, and Metropolitan Tower Life Insurance, based in Fresno, Calif., with a $30.47 million claim. Next in line are Landview Inc., based in Rupert, Idaho, with a $5.54 million claim, MWI Veterinary, based in Boise, with a $2.31 million trade debt claim and East Valley Development, LLC, based in Newport Beach, Calif., with a $2.16 million trade debt claim.

The Jerome, Idaho-based company filed Chapter 11 bankruptcy under case number 24-40158.

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