After uncertainty around sale of Somerset AppHarvest farm, deal now moving forward
A deal to sell AppHarvest’s Somerset greenhouse to a Netherlands-based indoor produce grower is back on track, attorneys said in a bankruptcy hearing Monday.
According to a memo filed in Texas federal bankruptcy court, Bosch Growers, a family owned Dutch company, will acquire the 30-acre berry and cucumber-growing greenhouse for $44 million, reaffirming a previous deal that was already approved by Judge David R. Jones, of the federal bankruptcy court for the Southern District of Texas.
The deal was modified to offer Bosch more protection and offer more chances for the recovery of funds for AppHarvest’s estate, said Anthony Grossi, an attorney representing AppHarvest.
“The revised agreement is better for (Bosch),” Grossi said. “It provides greater certainty to close, improves economics, including a breakup fee and puts Bosch in greater operational control during the interim period.”
Monday’s hearing came days after attorneys told Jones that a new deal — to sell the greenhouse to Greater Nevada Credit Union, a Nevada-based bank — was in the works. Jones had already approved the sale of the greenhouse to Bosch and news of a new deal drew the judge’s ire at a separate hearing last Thursday.
“Last week we had a mess,” Jones told the court. “Today, we have a process forward.”
The remaining funds AppHarvest had to keep the Somerset facility running expired at the end of September. According to the memo filed in court Sunday night, GNCU, the Nevada bank, will pay to keep the farm running until the sale closes. During that time, the involved parties will seek USDA approval of Bosch’s takeover of the facility and then the company will eventually take over operations.
The question of USDA approval — a requirement of the sale process — was a sticking point raised when the deal selling the greenhouse to GNCU was considered. Now GNCU is helping to push through USDA approval, said Frances Smith, an attorney representing GNCU.
Receiving USDA approval is a “significant undertaking,” Smith said. Should Bosch be denied by the USDA, then the Nevada bank will pay Bosch a $2.5 million break up fee.
At the beginning of the hearing, Grossi said GNCU had previously delayed getting USDA approval of the sale and Josh Wolfshohl, an attorney representing Bosch, said the “well was poisoned on the USDA approval.”
Smith denied that GNCU had delayed getting the approval and denied “poisoning the well.” The bank was prepared to assist moving forward and what happened previously was “water under the bridge.”
GNCU helped finance the building of the greenhouse and under the new deal the bank will be Bosch’s lender. Smith said they were working to repair the relationship.
Bosch was not aware of the possible deal to sell the greenhouse to GNCU until the hearing Thursday, said Wolfshohl, who was hired by Bosch shortly after that hearing. The company did not feel the process was fair until Jones got involved, Wolfshohl said.
“We’re thankful that you raised the issues you did,” Wolfshohl told Jones. “It’s concerning to me that they potentially wouldn’t have been raised if your honor hadn’t raised them.”
Jones offered an apology to Bosch “on behalf of everyone.”
“This is not the way the process should work,” Jones said. “Certainly not a process that I’m charged with overseeing.”
Tijmen van den Bosch, the company’s president, told the Herald-Leader in an email they’re ultimately happy with the outcome.
“As I said, the most important part is securing ongoing operations, jobs and berries,” van den Bosch said. “With this deal, we can operate in the coming days as usual and have plenty of time to secure a good transition. An outcome we are happy with.”
An update on the sale process will occur at a December 7 status conference, court records show.
