Essential Living Foods, Inc. is on the auction block a mere three weeks after seeking bankruptcy protection on December 1, 2016. Don’t blink, or you could miss it.
The Proposed Bid Procedures
Yesterday, Essential Living filed a motion asking the court to approve bidding procedures; the hearing is scheduled for December 27th.
- Terraholdings, LLC has made the initial “stalking horse” offer to purchase the company for $1.5 million, subject to overbidding with a proposed opening bid of $1.57 million.
- Essential Living has asked that the Court set a hearing to approve a sale to the successful bidder on or before a lender-imposed closing deadline of January 10, 2017.
- The sale process is being overseen by the financial advisory and investment banking firm Mirus Securities, Inc.
- The debtor has proposed that all bid documents must be received by the company and its bankruptcy counsel, Weintraub & Selth, no later than two business days before the sale hearing.
The Company’s Operations
According to its court filings, Essential Living, a subsidiary of Beon Holdings, Inc., was incorporated in 2004 as a benefit corporation that sells sustainably sourced organic superfoods sourced from small farms around the world in locations such as Ecuador, Peru, and Indonesia. Its primary products include gogi berries, golden berries, maca, raw cocoa, smoothie blends, trail mixes, supplements and other organic superfoods and snacks. (Yum!) Customers include Costco, Whole Foods Market, and health food stores and grocery stores across the country.
Essential Living has a co-manufacturing facility in Commerce, CA, a third-party logistics warehouse in Los Angeles, and several warehouses. It has eight full-time employees handing accounting and administration, sales, warehousing and logistics, and food safety. Substantially all of the company’s assets are to be sold, including product formulas and blends, contracts and significant purchase orders, know-how, trade names, trademarks, inventory, accounts receivable, and fixed assets. In its emergency motion seeking authority to use cash collateral, the debtor valued its primary assets at roughly $1.9 million (consisting of approximately $700,000 in accounts receivable, $1.2 million in inventory, and $50,000 in cash on hand). It has projected gross sales of $700,000 and collections of $500,000 for December 2016.
Additional information can be obtained from Mirus Securities, Weintraub & Selth, or the Bankruptcy Court. The case is pending in the U.S. Bankruptcy Court for the Central District of California, Los Angeles Division, under Case #2:16-bk-25844-RK.
Mette H. Kurth