AppHarvest announced Monday that the company is filing for bankruptcy. Officials said while the filing proceeds, the company will continue operations. The Kentucky-based company filed for Chapter 11 bankruptcy, referred to as ‘reorganizational’ bankruptcy, with the U.S. Bankruptcy Court for the Southern District of Texas.
Officials with AppHarvest said the company will undergo a financial and operational transition and will seek to sell its Berea facility to distribution partner Mastronardi for about $3.75 million.
Rowan County Judge Executive Harry Clark said AppHarvest has been a huge business for the Rowan County area.
“If it affects us, I think it would be only temporary but right now they are not talking about laying off anybody or closing the doors or something. They’re continuing on the work, they’re just restructuring financially,” said Clark.
AppHarvest officials said farming and shipping of produce is set to continue at all four facilities.
Clark said a closure of AppHarvest facilities would be a blow to the area’s economy, but he doesn’t see that happening.
“Well it does impact us if they do fail and close, it would certainly have an impact on us. But currently I think filing Chapter 11, they are just going to have an opportunity to reorganize,” Clark said. “The program is a great concept, it’s not going to go away. Somebody else will buy it out, it’s just too good a concept.”
Equilibrium is Appharvest’s largest creditor and is set to loan $30 million in Debtor-in-Possession financing to sustain greenhouses in Morehead, Richmond, and Somerset. Both of these plans await approval of the Bankruptcy Court. News of the bankruptcy came just more than a week after it was announced that founder Jonathon Webb was replaced as CEO by industry veteran Tony Martin.