Farmland Industries Inc. has received approval from the U.S. Bankruptcy Court to file a voluntary petition for Chapter 11 bankruptcy protection.
In the shocking announcement made today, the darling of farm cooperatives said it would use the approval to begin using $306 million of debtor-in-possession financing to continue business.
Farmland arranged for DIP financing through a group of financial institutions led by Deutsche Bank, Farmland’s primary lender.
Bob Terry, CEO, said the financing will allow the co-op to maintain its regular business activities while reassuring stakeholders that Farmland will continue to meet its post-petition financial commitments in a timely way.
The court also approved DIP financing to ongoing costs of normal business operations, including payments to vendors and suppliers.
In addition, the court approved Farmland’s motion to continue to honor its obligations under the Packers and Stockyard Act, namely payments to livestock producers in order to ensure a continuous, reliable product supply for its food business.
Farmland Industries, Kansas City, MO, (www.farmland.com) is a diversified farmer-owned cooperative. With its joint-venture partners, it supplies local cooperatives with agricultural inputs such as fertilizer, crop-protection products, and animal feeds.
As part of its farm-to-table mission, Farmland adds value to its farmer-owners’ grain and livestock by processing and marketing high-quality grain, pork, and beef and catfish products throughout the U.S. and in more than 30 countries.