In a recent development, KDC Agribusiness LLC, a notable player in the food recycling industry, has informed a Delaware bankruptcy court that it seeks to move from a Chapter 11 filing to a Chapter 7 liquidation.
The company conveyed that its financial resources to support its Chapter 11 proceeding have been exhausted due to an ongoing lawsuit that disrupted its debtor-in-possession funding and prospective asset sale plans. This leaves KDC Ag with little room to maneuver – pushing it to request the court for a conversion of the case.
Chapter 11 and Chapter 7 refer to U.S. federal bankruptcy laws under the U.S. Bankruptcy Code. Chapter 11 typically allows companies to restructure their debts and plan for profitability while keeping the business alive, whereas Chapter 7 is essentially the process of liquidation.
In the wake of this development, KDC Ag’s future seems to be treading on thin ice. Their actions in the coming time, especially how they tackle their ongoing lawsuit, will delineate their path forward amidst trying circumstances.
More details can be found on this development at Law360.