NutraCea files for Chapter 11 bankruptcy
November 11, 2009
by Eric Schroeder
PHOENIX — NutraCea, which refines rice bran into food products, on Nov. 10 filed a voluntary petition for protection under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Arizona. None of the company’s subsidiaries, including its Brazilian rice bran oil operation, Irgovel, were included in the bankruptcy filing.
In filing for bankruptcy, NutraCea said it would use the protection provided by the courts to restructure its operations, reduce overhead and sell non-core assets. The company earlier announced it would focus on its core businesses of stabilized rice bran, rice bran oil, nutraceuticals and baby cereal.
In the bankruptcy filing, NutraCea listed assets of $83,700,000 and total debts of $18,900,000. The company also said it has 192,967,680 shares of common stock and between 200 and 999 creditors.
"The protection provided by the Chapter 11 process will allow NutraCea to gain immediate liquidity through the $6,750,000 Debtor-in-Possession (DIP) financing facility provided by Wells Fargo Bank, N.A. and to resume normal day-to-day operations, while giving us the opportunity to restructure, strengthen our business performance and create long-term value for our stakeholders," said W. John Short, chief executive officer. "We will work hard to emerge from this process as quickly as possible with a streamlined cost structure that should allow us to operate as a healthier, more competitive and profitable company. We deeply appreciate the dedication and efforts of our employees, who have worked exceedingly hard during this challenging period. We look forward to the continued support of our customers, vendors and business partners as we reposition NutraCea for future growth and profitability."
Earlier this year, NutraCea said it would cut expenses and capacity, and the company sold a nutritional supplement distribution business, and temporarily closed manufacturing facilities in Louisiana. It also sold its interest in a company that was planning to build and run a wheat mill in Indonesia.