A judge today approved the bankruptcy reorganization plan of Eurofresh Inc., a major hydroponic vegetable grower and one of Southern Arizona's largest employers.
The ruling by U.S. Bankruptcy Judge Charles G. Case II in Phoenix paves the way for Eurofresh to emerge from bankruptcy reorganization in late November.
"It feels great," Eurofresh CEO Dwight Ferguson said.
"Obviously, this has been a long process for the company and its employees. We're excited to be in a position where we can move forward."
The company, which does business as Eurofresh Farms, employs about 1,500 workers at greenhouse operations spanning more than 300 acres near Willcox, with a smaller operation near Snowflake in eastern Arizona.
Eurofresh filed for Chapter 11 bankruptcy reorganization April 21, blaming costly pest and disease infestations, labor problems and high debt levels. Under Chapter 11, debtors are protected from legal actions while they work out a plan to repay creditors.
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As part of its reorganization plan, the company had entered into a settlement with the majority of its existing debt holders to convert more than $200 million of debt into equity.
The agreement states that Eurofresh will receive $35 million in new capital to repay debt, ensure financial stability and invest in strategic capital expenditures. The new money comes from an investor group including company founder and chairman Johan van den Berg.
In addition, Eurofresh reached agreement on claims by secured lenders and the U.S. Department of Labor, which had pressed a $6 million claim against the company for alleged labor-law violations.
Most recently, the company came to agreement with a group of lenders led by Silver Point Finance and including Wells Fargo, who will continue a long-term credit agreement with the company.