Contract analysis

1. On May 15, 2025 (the "Petition Date"), Greenfield Agricultural Partners LLC filed a voluntary petition for relief under Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code") in this Court. The Debtor continues to manage and operate its business and properties as a debtor-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No trustee, examiner, or official committee of uns

2. The Debtor is a vertically integrated agricultural chemicals manufacturer and distributor headquartered at 1400 Prairie Ridge Drive, Cedar Falls, Iowa 50613. Greenfield is one of the leading specialty agricultural chemicals companies in the Midwest and Mid-South regions of the United States, with a product portfolio that includes herbicides, fungicides, adjuvants, and seed treatments. The Debtor's flagship product

3. The Debtor operates three manufacturing plants located in Cedar Falls, Iowa; Decatur, Illinois; and Jonesboro, Arkansas. In addition, the Debtor maintains fourteen regional distribution centers strategically positioned across the Midwest and Mid-South to serve its customer base. The Debtor also operates a 640-acre research and development farm in Ames, Iowa, which supports ongoing product development and field tri

4. The Debtor's business is inherently seasonal. The agricultural chemicals industry experiences peak demand during the second and third quarters of each calendar year, corresponding to the spring planting and summer growing seasons. The current DIP budget period — May 15, 2025 through August 13, 2025 — captures the tail of the spring application season and the full summer application season. This thirteen-week windo

5. By this Motion, the Debtor seeks authority, in the exercise of its business judgment, to pay certain pre-petition claims of critical vendors and essential service providers in an aggregate amount not to exceed $12,000,000. The Debtor has identified the vendors and service providers whose continued engagement is essential to the uninterrupted operation of the Debtor's manufacturing plants and distribution network d

6. Failure to pay these claims will result in the disruption of the Debtor's manufacturing operations, the loss of irreplaceable supply relationships, and the destruction of going-concern value during the most commercially important period of the year. The consequences of such disruption would extend far beyond the critical vendors themselves: if the Debtor's manufacturing plants are forced to curtail or cease produc

7. The Debtor has sufficient liquidity to make the critical vendor payments sought herein. As of the Petition Date, the Debtor had approximately $11,800,000 in cash on hand. In addition, the Debtor has filed a contemporaneous motion seeking approval of a $175,000,000 senior secured superpriority debtor-in-possession revolving credit facility (the "DIP Facility") with Ironclad Capital Partners LP as Administrative Age

8. The Debtor respectfully submits that emergency relief is warranted. Peak season is underway, and certain suppliers have indicated they will halt shipments imminently absent assurance of payment. Every day of delay increases the risk of supply chain disruption and plant shutdowns. The Debtor therefore requests that this Motion be heard on an emergency or expedited basis.

9. This Court has jurisdiction over this Motion pursuant to 28 U.S.C. §§ 157 and 1334 and the Standing Order of Reference entered by the United States District Court for the Northern District of Iowa. This is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2), as it involves the administration of the Debtor's estate and the use of property of the estate. The Debtor confirms its consent to the entry of a fi

10. Venue is proper in this District pursuant to 28 U.S.C. §§ 1408 and 1409. The Debtor's principal place of business and its primary manufacturing facility are located in Cedar Falls, Iowa, within this District.

11. The statutory predicates for the relief sought herein are sections 105(a) and 363(b) of the Bankruptcy Code, together with the "doctrine of necessity" (also referred to as the "necessity of payment" doctrine), which authorizes a bankruptcy court to permit payment of pre-petition claims where such payment is essential to the continued operation of the debtor's business and the preservation of estate value.

III. BACKGROUND A. General Background of the Debtor

12. Greenfield Agricultural Partners LLC is an Iowa limited liability company with Employer Identification Number 42-8837291. The Debtor's registered agent is Capitol Registered Agents Inc., located at 400 E. Court Avenue, Suite 200, Des Moines, Iowa 50309. The Debtor was organized under the laws of the State of Iowa and has been engaged in the manufacture and distribution of specialty agricultural chemicals for over

13. The Debtor's management team consists of the following individuals: • Derek Calloway — Chief Executive Officer and Manager • Patricia Langford — Chief Financial Officer • Russell Teague — Chief Operating Officer • Monica Huang — General Counsel and Secretary • James Delacroix — Vice President, Treasury and Capital Markets

14. The Debtor manufactures and distributes a broad portfolio of specialty agricultural chemicals, including herbicides, fungicides, adjuvants, and seed treatments. The Debtor's products serve row-crop farmers, specialty-crop growers, and commercial applicators across the Midwest and Mid-South regions. The Debtor's flagship product, ClearGuard XR herbicide, is a post-emergence herbicide used in corn and soybean appli

15. The Debtor's manufacturing operations are conducted at three plants, each of which requires continuous operation during peak season: (a) Cedar Falls, Iowa — Located at 1400 Prairie Ridge Drive, Cedar Falls, Iowa 50613, this facility serves as the Debtor's corporate headquarters and primary manufacturing plant. The Cedar Falls plant is the largest of the Debtor's three facilities and produces the majority of the D

16. In addition to its three manufacturing plants, the Debtor operates fourteen regional distribution centers strategically located across the Midwest and Mid-South to provide timely delivery to its customer base. These distribution centers serve as the critical logistical link between the Debtor's manufacturing facilities and its end customers, and their continued operation is essential to the Debtor's ability to fu

17. The Debtor also operates a 640-acre research and development farm located at 4500 University Boulevard, Ames, Iowa 50010. The Ames R&D farm supports ongoing product development, efficacy testing, and regulatory field trials. The R&D farm plays a key role in the Debtor's efforts to develop next-generation products and to maintain the EPA registrations necessary for continued commercialization of existing products.

18. As of the Petition Date, the Debtor employs approximately 2,300 individuals across its manufacturing plants, distribution centers, R&D farm, and corporate offices. The Debtor's workforce includes a substantial number of skilled chemical engineers, plant operators, regulatory scientists, and logistics professionals who would be difficult to replace if lost. B. Pre-Petition Capital Structure

19. As of the Petition Date, the Debtor's capital structure consists of the following funded indebtedness: (a) First Lien Term Loan. The Debtor is the borrower under a first lien term loan (the "First Lien Term Loan") in the original principal amount of $325,000,000, of which approximately $310,000,000 remains outstanding as of the Petition Date. Prairie State Bank, N.A. serves as administrative agent. The First Lien

20. In the aggregate, the Debtor's total funded indebtedness and trade obligations amount to approximately $489,200,000 as of the Petition Date. C. Events Leading to the Chapter 11 Filing

21. The Debtor's financial difficulties are attributable to a confluence of adverse factors that materialized during fiscal year 2024 and continued into early fiscal year 2025. For the fiscal year ended December 31, 2024, the Debtor reported revenue of $612,400,000 and adjusted EBITDA of $38,700,000. While the Debtor's revenue base remained substantial, the Debtor's profitability declined significantly compared to pr

22. As a result of the Debtor's reduced profitability, the Debtor breached the Total Net Leverage Ratio covenant under the First Lien Term Loan as of December 31, 2024. The covenant required that the Debtor's Total Net Leverage Ratio not exceed 6.50x. The Debtor's actual ratio as of the testing date was 9.82x, calculated as follows: total funded secured debt of $382,300,000 ($310,000,000 First Lien Term Loan plus $72

23. On January 31, 2025, the Debtor and the first lien lenders entered into a forbearance agreement (the "Forbearance Agreement") pursuant to which the first lien lenders agreed to forbear from exercising remedies in respect of the December 31, 2024 covenant breach. The Forbearance Agreement expired on May 1, 2025, and was not extended.

24. Separately, on March 15, 2025, the Debtor failed to make its semi-annual interest payment on the Senior Unsecured Notes in full. Of the $3,999,500 due, the Debtor paid only $318,250, leaving a shortfall of $3,681,250. The thirty-day grace period under the indenture expired on April 14, 2025, at which point an Event of Default under the indenture occurred.

25. With the Forbearance Agreement expired, an Event of Default outstanding under the Senior Unsecured Notes indenture, and limited liquidity ($11,800,000 in cash on hand as of the Petition Date), the Debtor determined, in consultation with its advisors, that a filing for relief under Chapter 11 was necessary to preserve the value of the Debtor's business, maintain its operations during peak season, and pursue a rest

26. The Debtor estimates the enterprise value of its business at approximately $280,000,000 to $340,000,000, based on preliminary analyses conducted by the Debtor's financial advisor, Claridge Advisory Group LLC. D. The DIP Facility

27. Contemporaneously with the filing of this Motion, the Debtor has filed a separate motion (the "DIP Motion") seeking approval of a $175,000,000 senior secured superpriority debtor-in-possession revolving credit facility (the "DIP Facility"). The DIP Facility is provided by a syndicate of lenders consisting of Ironclad Capital Partners LP ($100,000,000 commitment), Ridgeline Opportunity Fund III LP ($50,000,000 com

28. The Debtor expects the Court to enter an interim order approving the DIP Facility (the "Interim DIP Order") at a hearing currently targeted for May 22, 2025. Upon entry of the Interim DIP Order, the Debtor will have access to $80,000,000 in interim DIP financing availability, in addition to its $11,800,000 in cash on hand.

29. The DIP budget, which covers the thirteen-week period from May 15, 2025 through August 13, 2025, expressly contemplates the critical vendor payments sought by this Motion. The DIP Lenders have reviewed and approved the inclusion of these payments in the DIP budget. The Debtor's thirteen-week cash flow projection shows ending cash of approximately $56,750,000 at the conclusion of the budget period, well above the

IV. THE CRITICAL VENDORS AND ESSENTIAL SERVICE PROVIDERS A. Nature of the Critical Vendor Relationships

30. The Debtor's manufacturing operations are fundamentally dependent on a continuous and reliable supply of specialty chemical raw materials. These raw materials include, among other things, active ingredients (both proprietary and generic), surfactants, solvents, emulsifiers, inert carriers, and proprietary adjuvant compounds. Each of these inputs must meet rigorous quality specifications, and many are subject to r

31. Many of the Debtor's critical raw materials are sourced from a limited number of qualified suppliers. The agricultural chemicals industry is characterized by a high degree of supplier concentration for certain specialty inputs. Several of the Debtor's key suppliers hold proprietary formulations for active ingredients or intermediates that cannot be readily obtained from alternative sources. Others have undergone

32. Replacing any of these critical suppliers would be an extraordinarily time-consuming and costly process. A new supplier of a regulated active ingredient or intermediate would need to undergo the EPA's supplier qualification and registration process, which typically requires six to eighteen months — and in some cases longer — from initiation to completion. During this period, the Debtor would be unable to manufact

33. The criticality of the current period cannot be overstated. Peak season — the second and third quarters of the calendar year — is currently underway. The Debtor's thirteen-week DIP budget projects total operating receipts of $129,600,000, with the bulk of receipts concentrated in Weeks 9 through 13 (approximately $49,800,000) as summer-season sales are billed and collected. These projected receipts are the founda

34. The Debtor has identified five chemical raw material suppliers (the "Top Five Suppliers") that are collectively owed approximately $9,400,000 in pre-petition trade payables. The Top Five Suppliers provide essential inputs for the Debtor's core product lines, including ClearGuard XR and other herbicide, fungicide, and seed treatment formulations. The specific identities of the Top Five Suppliers, together with the

35. Several of the Top Five Suppliers have already communicated — either directly to the Debtor's management or through their legal counsel — that they will cease shipments absent payment of their pre-petition balances. Others have indicated that they will agree to continue supplying the Debtor only on cash-in-advance or cash-on-delivery terms, which would dramatically increase the Debtor's working capital requiremen

36. The Debtor, in the exercise of its business judgment and in consultation with its management team, its restructuring advisor (Claridge Advisory Group LLC), and its counsel (Calderwood & Harkness LLP), has identified the Top Five Suppliers as "Critical Vendors" within the meaning of the doctrine of necessity. Each of these suppliers satisfies the criteria for critical vendor treatment: (i) The goods provided by ea

37. In the first quarter of 2025, the Debtor's Cedar Falls manufacturing plant — its primary and largest production facility — underwent a major compressor overhaul. The compressor systems at the Cedar Falls plant are integral to the chemical processing operations conducted at that facility, including the production of ClearGuard XR and other herbicide and fungicide products. The compressor overhaul was performed by

38. The total cost of the compressor overhaul was $4,200,000. Of this amount, $2,600,000 has been paid by the Debtor. The remaining $1,600,000 was outstanding as of the Petition Date and constitutes a pre-petition trade payable.

39. Norris has communicated to the Debtor, through its principal, that it will not perform warranty work, ongoing maintenance, or future emergency repairs on the Cedar Falls compressor systems absent payment of the outstanding $1,600,000 balance. Norris's refusal to provide warranty and maintenance support poses a serious and imminent risk to the Debtor's operations. The compressor systems are complex, high-pressure

40. Norris possesses specialized expertise in the particular compressor systems installed at the Cedar Falls plant. These systems were originally designed and installed by a manufacturer that has since exited the North American market, making Norris one of a very small number of service providers with the knowledge and experience necessary to maintain and repair this equipment. Qualifying an alternative service provi

41. For these reasons, the Debtor seeks to include the $1,600,000 Norris claim in the critical vendor pool authorized for payment under this Motion. D. Other Essential Service Providers

42. In addition to the Top Five Suppliers and Norris, the Debtor has identified a limited number of other essential service providers whose pre-petition claims should be authorized for payment as part of the critical vendor program. These service providers include, among others: (a) Logistics Providers. The Debtor's distribution network depends on a small number of specialized logistics providers that operate dedicat

43. The aggregate amount of pre-petition claims owed to these other essential service providers is estimated at approximately $1,000,000. The identities and specific amounts are set forth on the Confidential Schedule of Critical Vendors attached as Exhibit B. E. Aggregate Cap and Procedures

44. The total authorization sought by this Motion is not to exceed $12,000,000 in the aggregate, allocated approximately as follows:

45. The $12,000,000 cap provides a reasonable cushion above the currently identified critical vendor claims to address additional essential vendor relationships as they may be identified in the ordinary course during the DIP budget period. The Debtor does not anticipate exceeding this cap but seeks the flexibility to address unforeseen supply chain needs as they arise.

46. To ensure that the estate receives value in exchange for critical vendor payments and to protect against abuse, the Debtor proposes to implement the following procedures (the "Critical Vendor Procedures"): (a) Critical Vendor Agreement. As a condition to receiving any payment under this Motion, each critical vendor will be required to execute a "Critical Vendor Agreement" substantially in the form to be approved

V. LEGAL BASIS FOR RELIEF A. Section 363(b) of the Bankruptcy Code — Sound Business Judgment

47. Section 363(b)(1) of the Bankruptcy Code provides that "[t]he trustee, after notice and a hearing, may use, sell, or lease, other than in the ordinary course of business, property of the estate." 11 U.S.C. § 363(b)(1). Although the payment of pre-petition claims is not ordinarily authorized in a Chapter 11 case — where the general rule is that pre-petition claims are to be addressed through the plan process — cou

48. The "business judgment" standard governs the court's review of a proposed transaction under section 363(b). Under this standard, the court should approve a transaction if the debtor demonstrates a sound business purpose and the proposed action is undertaken in good faith. The court need not find that the proposed action is the best possible course of action or the only available alternative; rather, the court nee

49. Here, the Debtor has a compelling and well-documented business purpose for the critical vendor payments: preserving the Debtor's manufacturing operations and supply chain during the peak season, which is the single most important period for the Debtor's revenue generation and, accordingly, for the preservation and maximization of estate value. The Debtor's management — including Derek Calloway (CEO), Russell Teag

50. Section 105(a) of the Bankruptcy Code provides that "[t]he court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title." 11 U.S.C. § 105(a). Courts have long recognized that section 105(a), together with section 363(b), provides the statutory foundation for the "doctrine of necessity" (also referred to as the "necessity of payment" doctrine), which pe

51. The doctrine of necessity traces its origins to the railroad receivership cases of the nineteenth and early twentieth centuries, in which courts authorized the payment of pre-receivership claims of suppliers and employees where necessary to keep the railroads operating. See Miltenberger v. Logansport, C. & S.W. Ry. Co., 106 U.S. 286, 311–12 (1882); In re Boston & Me. Corp., 634 F.2d 1359, 1382 (1st Cir. 1980). Th

52. The Eighth Circuit and courts within this District have recognized the doctrine of necessity in appropriate circumstances. Courts generally require the debtor to demonstrate the following elements to justify payment of pre-petition claims under the doctrine of necessity: (i) The vendor's goods or services are essential to the debtor's continued operations; (ii) The vendor will cease doing business with the debtor

53. All four elements are satisfied here. As described in detail in Section IV of this Motion: (i) Essential goods and services. The Top Five Suppliers provide the raw materials without which the Debtor's manufacturing plants cannot operate. Norris provides the maintenance and warranty support without which the Cedar Falls plant's compressor systems are at risk of failure. The other essential service providers furnis

54. The Critical Vendor Agreement requirement ensures that the estate receives tangible value in exchange for each critical vendor payment — namely, the vendor's binding commitment to continue supplying the Debtor on customary trade terms for the duration of the Chapter 11 case. This quid pro quo distinguishes the critical vendor program from a mere preferential payment: the estate is not simply paying pre-petition c

55. The disgorgement provision in the Critical Vendor Agreement provides further protection. If a vendor accepts payment but subsequently refuses to supply the Debtor on customary terms or otherwise breaches the Critical Vendor Agreement, the payment may be recovered by the estate. This provision aligns the vendor's incentives with the estate's interests and deters opportunistic behavior.