Somerset AppHarvest sale to Dutch company back in place

Carla Slavey, Commonwealth Journal, Somerset, Ky.
·3 min read

Oct. 3—The deal to sell AppHarvest's Somerset indoor farm is apparently back on the table after a Monday morning court hearing clarified that a Dutch-based company who won a bid for the facility will, indeed, be the buyer.

The deal looked to be in jeopardy last week when a Thursday hearing was held in Text Judge David R. Jones's federal bankruptcy court. During that hearing, AppHarvest representatives said that rather than sell the facility to Bosch Growers, which had the high bid of $44 million during an auction earlier this year, the Kentucky company planned to sell the facility to Grater Nevada Credit Union (GNCU) instead.

This seemed to anger Judge Jones, who had signed off on the original deal.

Jones told those who were at the Thursday hearing that they didn't get "to decide whether or not to comply with an order that I enter. Unless the order has been reversed on appeal, you follow that order. It is the law. And I really don't like parties who decide to take positions contrary to my orders and don't have the courtesy to come to me."

No representatives from Bosch Growers were present at that hearing, and, as reported in the Herald Leader, Bosch was not aware of the deal with GNCU until that hearing.

Part of the reason given to renege on the approved sale to Bosch was that GNCU had indicated that there may be problems in securing approval from the USDA for the original plan.

According to the Herald Leader, a potential misunderstanding during the auction process led to the GNCU deal, regarding outstanding debt owed on a loan to GNCU that Bosch was to assume as part of the bid. The Herald Leader reported that following court approval of the sale, Grossi said that GNCU told AppHarvest of concerns that the USDA, which backed the loan, would not approve the deal with Bosch.

The Herald Leader quoted AppHarvest attorney Anthony Grossi as saying GNCU had delayed getting USDA approval of the deal.

Josh Wolfshohl, an attorney representing Bosch, also stated that the "well was poisoned on the USDA approval."

While GNCU attorney Frances Smith denied the delay, over the weekend the agreement was revised to add a $2.5 million "breakup fee" that GNCU would pay Bosch should the USDA not approve the sale.

On Tuesday, President and CEO for the Somerset-Pulaski Economic Development Authority (SPEDA) Chris Girdler reacted to the news of the Bosch deal being back on by saying, "I am very happy to hear that the deal has the green light to move forward and believe this will be a great new beginning for the facility and our community as a whole. I remain optimistic about what the future holds.

"Bosch has been very proactive in their outreach, and community presence and involvement is important to them."

Girdler said last week that Bosch would likely continue the facility's strawberry production as it is a "berry company."

AppHarvest filed for Chapter 11 bankruptcy in July while pursuing a transition of its Berea operations to Mastronardi Produce or one of its affiliates in exchange for $3.75 million in funding to help provide liquidity to support operations at AppHarvest's facilities in Somerset, Morehead, and Richmond. This is all after arriving in Somerset with much fanfare in June of 2021, when ground was broken on a 30-acre sustainable indoor farm to grow strawberries and cucumbers year-round. The Somerset greenhouse was to be one of five in the state either up and running or in the works at the time of its public introduction.