UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF IOWA CEDAR RAPIDS DIVISION
DECLARATION OF PATRICIA LANGFORD, CHIEF FINANCIAL OFFICER OF GREENFIELD AGRICULTURAL PARTNERS LLC, IN SUPPORT OF THE DEBTOR'S EMERGENCY MOTION FOR ENTRY OF INTERIM AND FINAL ORDERS (I) AUTHORIZING THE DEBTOR TO OBTAIN POST-PETITION FINANCING PURSUANT TO 11 U.S.C. §§ 105, 361, 362, 363, 364, AND 507, (II) GRANTING LIENS AND SUPERPRIORITY ADMINISTRATIVE EXPENSE CLAIMS, (III) AUTHORIZING THE USE OF CASH COLLATERAL, AND (IV) GRANTING ADEQUATE PROTECTION TO PRE-PETITION SECURED LENDERS
I, Patricia Langford, hereby declare as follows:
I. INTRODUCTION AND DECLARANT IDENTIFICATION
1. I am the Chief Financial Officer of Greenfield Agricultural Partners LLC ("Greenfield," the "Debtor," the "Company," or "GAP"), an Iowa limited liability company and the debtor and debtor-in-possession in the above-captioned Chapter 11 case. I am over 18 years of age and am competent to testify to the matters set forth herein. I make this declaration under penalty of perjury pursuant to 28 U.S.C. § 1746.
2. I have served as the Chief Financial Officer of Greenfield since September 2018, a period of approximately six years and eight months. In my capacity as CFO, I am responsible for all financial, treasury, and accounting functions of the Company, including oversight of financial reporting, budgeting, cash management, internal controls, tax compliance, and relationships with the Company's lenders, auditors, and financial advisors. I report directly to Derek Calloway, the Chief Executive Officer and Manager of Greenfield.
3. In connection with my duties, I work closely with James Delacroix, Vice President, Treasury and Capital Markets, who oversees day-to-day capital markets activities, bank relationships, and cash management operations. Mr. Delacroix reports directly to me and has been instrumental in coordinating the Company's liquidity management and the negotiation of the proposed debtor-in-possession financing facility described herein.
4. I have personal knowledge of the facts stated in this declaration or have acquired such knowledge through my review of the books and records of the Debtor maintained in the ordinary course of the Debtor's business, through discussions with other members of the Debtor's management team, and through consultations with the Debtor's financial and legal advisors. If called upon to testify, I could and would testify competently to the matters set forth herein.
5. I submit this declaration in support of the Emergency Motion of the Debtor for Entry of Interim and Final Orders (I) Authorizing the Debtor to Obtain Post-Petition Financing Pursuant to 11 U.S.C. §§ 105, 361, 362, 363, 364, and 507, (II) Granting Liens and Superpriority Administrative Expense Claims, (III) Authorizing the Use of Cash Collateral, and (IV) Granting Adequate Protection to Pre-Petition Secured Lenders (the "DIP Motion"), filed concurrently herewith on the date of the Debtor's voluntary petition under Chapter 11 of the Bankruptcy Code.
6. The purpose of this declaration is to provide the Court with: (a) an overview of the Debtor's business and operations; (b) a description of the Debtor's pre-petition capital structure; (c) a summary of the events and circumstances that led to the Chapter 11 filing; (d) a description of the Debtor's immediate and near-term liquidity needs; and (e) a detailed explanation of the necessity and terms of the proposed $175,000,000 senior secured superpriority debtor-in-possession credit facility (the "DIP Facility") that the Debtor seeks authority to enter into pursuant to the DIP Motion.
II. THE DEBTOR'S BUSINESS AND OPERATIONS
A. Corporate Overview
7. The Debtor's full legal name is Greenfield Agricultural Partners LLC. The Company is a limited liability company organized and existing under the laws of the State of Iowa, with its Employer Identification Number being 42-8837291. The Company's principal executive offices and headquarters are located at 1400 Prairie Ridge Drive, Cedar Falls, Iowa 50613. The Company's registered agent in the State of Iowa is Capitol Registered Agents Inc., located at 400 E. Court Avenue, Suite 200, Des Moines, Iowa 50309.
8. Greenfield is a vertically integrated agricultural chemicals manufacturer and distributor. The Company develops, manufactures, and distributes a diverse portfolio of crop protection products, including herbicides, fungicides, adjuvants, and seed treatments. These products are sold primarily to agricultural retailers, cooperatives, and distributors throughout the Midwest and Mid-South regions of the United States — areas that collectively represent the nation's most productive agricultural corridors.
9. The Company's flagship product is ClearGuard XR, a proprietary broad-spectrum herbicide designed for use in corn and soybean production systems. ClearGuard XR has been a cornerstone of the Company's product portfolio and has historically represented a significant portion of the Company's annual revenue. The product is valued by farmers and agricultural professionals for its efficacy, crop safety profile, and competitive pricing relative to comparable branded products. As discussed more fully below, the regulatory status of ClearGuard XR has been a material factor in the Company's recent financial challenges.
10. This Chapter 11 case involves a single-entity filing. The Debtor has no subsidiary debtors and no affiliated entities that are filing for bankruptcy protection in conjunction with this case.
B. Manufacturing and Distribution Infrastructure
11. Greenfield operates three manufacturing plants strategically located across the Company's core market area:
(a) Cedar Falls, Iowa (Headquarters Campus) — 1400 Prairie Ridge Drive, Cedar Falls, Iowa 50613. This is the Company's largest and most advanced manufacturing facility, co-located with the Company's corporate headquarters. The Cedar Falls plant produces the full range of the Company's herbicide and fungicide products, including ClearGuard XR, and houses the Company's primary quality control laboratory and formulation development center.
(b) Decatur, Illinois — 2200 Industrial Boulevard, Decatur, Illinois 62521. The Decatur facility specializes in the production of adjuvants and seed treatment products and serves as a critical distribution hub for the Company's Illinois, Indiana, and Ohio customer base. This facility operates two production lines and maintains significant finished goods inventory capacity.
(c) Jonesboro, Arkansas — 815 County Road 740, Jonesboro, Arkansas 72401. The Jonesboro plant services the Company's Mid-South markets, including Arkansas, Mississippi, Tennessee, and Missouri. This facility manufactures herbicide and fungicide concentrates and performs final blending and packaging operations for distribution to regional customers.
12. All three manufacturing plants are essential to the Debtor's operations and must continue to operate on a continuous basis in order to meet seasonal demand. The agricultural chemicals industry is characterized by extremely tight production windows that align with the planting and growing seasons. Any disruption in manufacturing operations — including even a temporary shutdown — would cause irreparable harm to the business and the estate. Specifically, a shutdown of any of the three plants would result in the inability to fulfill existing customer orders, the loss of key customer relationships that have been developed over many years, spoilage or degradation of work-in-process chemical products, and significant costs associated with safely shutting down and subsequently restarting chemical production processes. Moreover, because the DIP Budget period corresponds with the heart of the growing season, any disruption during this window would result in a permanent loss of seasonal revenue that cannot be recaptured.
13. In addition to its three manufacturing plants, the Debtor operates fourteen regional distribution centers located across the Midwest and Mid-South. These distribution centers serve as the logistical backbone of the Company's go-to-market operations, enabling timely delivery of crop protection products to customers during the critical planting and application windows.
14. The Debtor also owns and operates a 640-acre research and development farm located at 4500 University Boulevard, Ames, Iowa 50010. The Ames R&D farm is used for product testing, field trials, and development of new formulations and application protocols. The facility works in close collaboration with Iowa State University's College of Agriculture and Life Sciences and plays a vital role in the Company's product innovation pipeline.
C. Workforce.
15. As of the Petition Date, the Debtor employs approximately 2,300 individuals across its manufacturing, distribution, research and development, and administrative functions. The Company's workforce includes skilled chemical engineers, plant operators, quality assurance technicians, distribution and logistics professionals, sales representatives, regulatory affairs specialists, and corporate support staff.
16. The Debtor's workforce fluctuates seasonally, with significant increases during the second and third quarters of each fiscal year (corresponding to the spring planting season and summer application season, respectively) to meet heightened production and distribution demands. During peak periods, the Company supplements its permanent workforce with seasonal and temporary employees.
17. The Company's employees are critical to the preservation of value in this Chapter 11 case. The Debtor's workforce possesses specialized knowledge of chemical manufacturing processes, regulatory requirements, and customer relationships that cannot be readily replaced. Retention of the Debtor's employees is therefore essential to the continued operation of the business and to any successful reorganization or sale process.
D. Seasonal Nature of the Business
18. The agricultural chemicals business is highly seasonal. The Company's peak sales and cash receipts occur during the second quarter (April through June, corresponding to the spring application season) and the third quarter (July through September, corresponding to the summer growing and application season). During these periods, farmers and agricultural retailers purchase and apply herbicides, fungicides, adjuvants, and seed treatments to protect their crops. The first and fourth quarters are characterized by lower sales activity, during which time the Company builds inventory, conducts maintenance on its manufacturing facilities, and plans for the upcoming growing season.
19. The seasonality of the business is critically relevant to the DIP Facility and the DIP Budget. The 13-week DIP Budget period runs from May 15, 2025 through August 13, 2025, which captures the tail end of the spring application season and the entirety of the summer application season. This period represents the Company's most important revenue-generating window. Any disruption to the Debtor's operations during this period — whether caused by a lack of liquidity, an inability to procure raw materials, or a shutdown of manufacturing facilities — would result in a permanent and irrecoverable loss of seasonal revenue and customer relationships, to the severe detriment of the estate and all of its stakeholders.
III. MANAGEMENT TEAM
20. The Debtor's senior management team is comprised of the following individuals, each of whom plays a critical role in the Company's operations and in the administration of this Chapter 11 case:
(a) Derek Calloway — Chief Executive Officer and Manager. Mr. Calloway is responsible for the overall strategic direction of the Company and serves as the sole Manager of the limited liability company. Mr. Calloway has led Greenfield since 2016 and has extensive experience in the agricultural chemicals industry.
(b) Patricia Langford (Declarant) — Chief Financial Officer. As described above, I am responsible for all financial operations, financial reporting, treasury oversight, budgeting, and accounting functions of the Company. I have served in this role since September 2018.
(c) Russell Teague — Chief Operating Officer. Mr. Teague oversees all manufacturing operations, supply chain management, and distribution logistics across the Company's three plants and fourteen regional distribution centers. Mr. Teague is responsible for ensuring the continuity and efficiency of the Company's production processes and the timely delivery of products to customers.
(d) Monica Huang — General Counsel and Secretary. Ms. Huang is responsible for all legal affairs of the Company, including regulatory compliance, environmental matters, intellectual property protection, commercial contracts, and corporate governance. Ms. Huang works closely with the Company's outside counsel on all litigation and regulatory matters.
(e) James Delacroix — Vice President, Treasury and Capital Markets. Mr. Delacroix oversees the Company's day-to-day cash management operations, banking relationships, capital structure, and financing activities. Mr. Delacroix reports directly to me and has been closely involved in the negotiation of the DIP Facility and the preparation of the 13-week DIP Budget.
21. Each member of the senior management team has committed to remaining with the Company through the Chapter 11 process and is essential to the Debtor's ability to operate its business, execute a successful restructuring, and maximize value for all stakeholders.
IV. PRE-PETITION CAPITAL STRUCTURE
A. Overview of Total Indebtedness
22. As of the Petition Date, the Debtor's total pre-petition indebtedness is approximately $489,200,000, consisting of funded debt obligations and trade and other unsecured claims. The following paragraphs describe each component of the Debtor's capital structure in detail.
B. First Lien Term Loan
23. The Debtor is party to a First Lien Term Loan Credit Agreement (as amended) with Prairie State Bank, National Association ("Prairie State Bank" or "PSB"), as administrative agent and collateral agent. Prairie State Bank's principal offices are located at 500 Main Street, Suite 1200, Kansas City, Missouri 64105. Key personnel at Prairie State Bank who have been involved in the Debtor's credit relationship include Thomas Whitaker, Senior Vice President in the Loan Workout Group, and Angela Reeves, Vice President in Loan Administration.
24. The First Lien Term Loan was originally entered into in November 2021. The facility has an outstanding principal balance of $310,000,000 as of the Petition Date, with a stated maturity date of November 2026. The First Lien Term Loan bears interest at a floating rate equal to the Secured Overnight Financing Rate ("SOFR") plus 450 basis points per annum.
25. The First Lien Term Loan is secured by a first-priority lien on substantially all assets of Greenfield, including, without limitation, all real property, personal property, equipment, inventory, accounts receivable, intellectual property, and general intangibles of the Debtor, subject to the split-collateral arrangement with respect to the ABL Revolving Credit Facility described below.
C. ABL Revolving Credit Facility
26. The Debtor is also party to an Asset-Based Lending Revolving Credit Facility (the "ABL Revolver"), with Prairie State Bank, N.A. serving as administrative agent and Hawthorn National Bank and Northland Savings Bank, F.S.B. as participating lenders. The ABL Revolver was originally entered into in March 2023 and has a committed facility size of $95,000,000. As of the Petition Date, the ABL Revolver has an outstanding drawn balance of $72,300,000, with the remaining availability subject to borrowing base limitations.
27. The ABL Revolver matures in May 2026 and bears interest at SOFR plus 275 basis points per annum. The ABL Revolver is secured by a first-priority lien on the Debtor's receivables and inventory pursuant to a split-collateral arrangement under which the First Lien Term Loan lenders hold a first-priority lien on all other collateral and a second-priority lien on receivables and inventory, while the ABL Revolver lenders hold a first-priority lien on receivables and inventory and a second-priority lien on all other collateral. This intercreditor arrangement is governed by an Intercreditor Agreement dated as of March 2023 among Prairie State Bank (in its dual capacity as First Lien Agent and ABL Agent), Hawthorn National Bank, and Northland Savings Bank.
D. Senior Unsecured Notes
28. The Debtor has outstanding Senior Unsecured Notes (the "Notes") in the aggregate principal amount of $84,200,000. The Notes were issued in March 2024 under an indenture (the "Indenture") with Meridian Trust Company serving as indenture trustee. Meridian Trust Company is located at 101 Park Avenue, 20th Floor, New York, New York 10178. The key contact at Meridian Trust Company is Robert Fennimore, Vice President, Corporate Trust.
29. The Notes bear interest at a fixed rate of 9.50% per annum, payable semi-annually. The Notes mature in March 2027 and are unsecured obligations of the Debtor, ranking pari passu with all other senior unsecured indebtedness. As described more fully below, the Debtor missed its semi-annual interest payment due on March 15, 2025, and the resulting event of default under the Indenture has matured following the expiration of the 30-day grace period.
E. Trade and Other Unsecured Claims
30. As of the Petition Date, the Debtor has approximately $22,700,000 in outstanding trade payables and other unsecured obligations, including amounts owed to raw material suppliers, service providers, utility companies, and other general trade creditors. These amounts are unsecured and are not subject to any liens or security interests.
31. Together with the $84,200,000 in Senior Unsecured Notes, the total pool of unsecured claims is approximately $106,900,000.
F. Pre-Petition Capital Structure Summary
32. The following table summarizes the Debtor's pre-petition capital structure as of the Petition Date:
G. Estimated Enterprise Value
33. Based on preliminary analyses performed by the Debtor's financial advisor, Claridge Advisory Group LLC, and corroborated by the independent appraisal work of Bellwether Valuation Services Inc., the Debtor's estimated enterprise value falls within a range of approximately $280,000,000 to $340,000,000, with an approximate mid-point of $310,000,000. This estimated enterprise value represents a significant shortfall relative to the Debtor's total funded debt of $466,500,000 (i.e., $310,000,000 First Lien Term Loan plus $72,300,000 ABL Revolver plus $84,200,000 Senior Unsecured Notes), underscoring the critical need for a comprehensive restructuring of the Debtor's balance sheet and the immediate necessity of the DIP Facility to preserve the Debtor's going-concern value during the pendency of this Chapter 11 case.
V. EVENTS LEADING TO THE CHAPTER 11 FILING
34. The Debtor's decision to file for Chapter 11 protection was the product of a confluence of severe operational, market, regulatory, and financial challenges that developed over the course of 2024 and into early 2025. Each of these challenges is described in detail below.
A. Operational and Market Challenges
35. Severe Drought Conditions (2024 Growing Season). The 2024 growing season was marked by severe drought conditions across the Midwest and Mid-South — the Debtor's primary markets. Persistent below-average rainfall and above-average temperatures during the spring and summer months significantly reduced crop planting activity across the region. As a result, farmers curtailed their use of herbicides, fungicides, and adjuvants, leading to a substantial decline in demand for the Debtor's products. The drought conditions were particularly acute in Iowa, Illinois, and Arkansas, the states in which the Debtor's three manufacturing plants are located and which represent the core of the Debtor's customer base. The revenue impact of the drought was severe and immediate, as farmers who did not plant crops had no need for crop protection chemicals, and those who did plant reduced acreage applied chemicals more sparingly.
36. Depressed Commodity Pricing. Concurrent with the drought conditions, agricultural commodity prices experienced sustained downward pressure throughout 2024. Corn and soybean prices declined to multi-year lows, reducing farm profitability and further dampening demand for agricultural chemical inputs. When commodity prices are depressed, farmers' margins contract, and their willingness and ability to invest in crop protection products diminishes accordingly. Many of the Debtor's customers delayed their purchasing decisions, reduced order volumes, or sought lower-cost alternatives to the Debtor's branded products. This dynamic exerted additional pressure on the Debtor's revenue and profitability.
37. Delayed EPA Re-Registration of ClearGuard XR. ClearGuard XR, the Debtor's flagship proprietary herbicide, has historically been a significant revenue driver for the Company. ClearGuard XR is subject to periodic re-registration by the United States Environmental Protection Agency ("EPA") under the Federal Insecticide, Fungicide, and Rodenticide Act ("FIFRA"). The re-registration process for ClearGuard XR, which was expected to be completed by mid-2024, has been significantly delayed due to what the Debtor understands to be increased regulatory scrutiny and resource constraints within the EPA's Office of Pesticide Programs. The delay in the re-registration process has created substantial market uncertainty and has materially inhibited sales of ClearGuard XR. Customers have been reluctant to commit to purchase volumes of ClearGuard XR pending clarity on its regulatory status, and certain agricultural retailers have reduced or eliminated their stocking of ClearGuard XR in favor of competing products whose registrations are not under review. The regulatory delay has had a material adverse effect on the Debtor's revenue and EBITDA, as ClearGuard XR has historically accounted for a meaningful share of the Company's total sales.
B. Financial Deterioration — FY 2024
38. The combined impact of the drought conditions, depressed commodity pricing, and the ClearGuard XR regulatory delay resulted in a dramatic deterioration in the Debtor's financial performance during fiscal year 2024. Specifically:
(a) Revenue. The Debtor's FY 2024 revenue was $612,400,000, representing a significant decline from prior fiscal years and falling well below management's budget and the projections underlying the Company's debt covenants.
(b) EBITDA. The Debtor's FY 2024 EBITDA was $38,700,000. Adjusted EBITDA for the last twelve months ("LTM") ended December 31, 2024, calculated in accordance with the definitions in the First Lien Term Loan Credit Agreement, was $37,700,000. This figure was used for purposes of covenant testing as described below.
(c) Cash on Hand. As of the Petition Date, the Debtor had only $11,800,000 in cash on hand, a critically low level given the Company's operational scale, its seasonal cash needs, and the magnitude of its outstanding obligations.
C. Covenant Breach and Forbearance
39. As of December 31, 2024, the Debtor was in breach of the Total Net Leverage Ratio covenant contained in the First Lien Term Loan Credit Agreement. The covenant required the Debtor to maintain a Total Net Leverage Ratio not exceeding 6.50 to 1.00, measured quarterly. As of December 31, 2024, the Debtor's actual Total Net Leverage Ratio was 9.82 to 1.00, calculated as follows:
• Net Debt: $310,000,000 (First Lien Term Loan) + $72,300,000 (ABL Revolver) – $11,800,000 (Unrestricted Cash) = $370,500,000
• LTM Adjusted EBITDA: $37,700,000
• Total Net Leverage Ratio: $370,500,000 ÷ $37,700,000 = 9.82x
• Maximum Permitted: 6.50x
40. The covenant breach constituted an event of default under the First Lien Term Loan Credit Agreement, which, absent a waiver or forbearance, would have entitled Prairie State Bank, as administrative agent, to exercise its remedies under the credit agreement, including accelerating the outstanding principal balance and foreclosing on the Debtor's assets.
41. On January 31, 2025, following extensive negotiations, the Debtor and Prairie State Bank, N.A., in its capacity as administrative agent under the First Lien Term Loan, executed a Forbearance Agreement pursuant to which the First Lien lenders agreed to forbear from exercising their remedies with respect to the leverage covenant breach for a specified period. The Forbearance Agreement was originally set to expire on May 1, 2025. Despite the Debtor's efforts to negotiate an extension of the forbearance period, no extension was agreed upon, and the Forbearance Agreement expired in accordance with its terms on May 1, 2025.
D. Missed Interest Payment on Senior Unsecured Notes
42. In addition to the covenant breach under the First Lien Term Loan, the Debtor was unable to make its full semi-annual interest payment on the Senior Unsecured Notes when it became due on March 15, 2025. The total semi-annual interest payment due under the Indenture was $3,999,500, calculated as follows:
• Outstanding Principal: $84,200,000
• Annual Coupon: 9.50%
• Semi-Annual Interest Payment: $84,200,000 × 9.50% ÷ 2 = $3,999,500
43. Of the $3,999,500 due, the Debtor was only able to remit $318,250 to Meridian Trust Company, as indenture trustee, on March 15, 2025, leaving a shortfall of $3,681,250. The partial payment represented the maximum amount that the Debtor could pay while maintaining minimum operating liquidity necessary to fund its ongoing business operations.
44. The Indenture provides for a 30-day grace period following a missed interest payment before an event of default is deemed to have occurred. The 30-day grace period expired on April 14, 2025, and the Debtor was unable to cure the shortfall during the grace period. Accordingly, an event of default under the Indenture has occurred and is continuing as of the Petition Date.
E. Cedar Falls Plant Compressor Overhaul
45. In the first quarter of 2025, the Debtor's Cedar Falls manufacturing plant underwent a critical compressor overhaul at a total project cost of $4,200,000. The compressor system is essential to the production of the Company's herbicide and fungicide products at the Cedar Falls facility, and the overhaul was necessary to ensure the continued safe and efficient operation of the plant. The work was performed by Norris Industrial Services LLC, a specialized industrial maintenance contractor. Of the $4,200,000 total project cost, $2,600,000 has been paid by the Debtor, while $1,600,000 remains outstanding and unpaid as of the Petition Date. This unpaid balance to Norris Industrial Services LLC is included within the critical vendor claims to be addressed in the Debtor's separately filed Motion for Entry of an Order Authorizing the Debtor to Pay Pre-Petition Claims of Critical Vendors (the "Critical Vendor Motion").
F. Decision to File
46. By early May 2025, the Debtor faced an untenable situation. The Forbearance Agreement with Prairie State Bank had expired on May 1, 2025, without extension, leaving the First Lien lenders free to exercise their remedies, including acceleration and foreclosure. The Notes payment default had matured following the expiration of the 30-day grace period on April 14, 2025. Cash on hand had declined to $11,800,000 — a level that was wholly insufficient to fund the Debtor's ongoing manufacturing, distribution, and corporate operations, let alone the cost of a restructuring. The Debtor's enterprise value, estimated at $280,000,000 to $340,000,000, was significantly below its total funded indebtedness of $466,500,000, confirming that the Company's balance sheet required a comprehensive restructuring.
47. After careful deliberation and in consultation with the Debtor's legal counsel, Calderwood & Harkness LLP, and its financial advisor, Claridge Advisory Group LLC, the Debtor's Manager, Derek Calloway, determined that a filing under Chapter 11 of the Bankruptcy Code was necessary to preserve the business as a going concern, protect the value of the estate for the benefit of all stakeholders, and provide the Debtor with the breathing room needed to pursue a restructuring through a plan of reorganization or, alternatively, a value-maximizing sale of substantially all of the Debtor's assets under Section 363 of the Bankruptcy Code.
48. Accordingly, on May 15, 2025 (the "Petition Date"), the Debtor filed a voluntary petition for relief under Chapter 11 of Title 11 of the United States Code. The case was assigned Case No. 25-01147 and has been assigned to the Honorable Margaret R. Dunleavy of the United States Bankruptcy Court for the Northern District of Iowa, Cedar Rapids Division. The Debtor continues to operate its business and manage its properties as a debtor-in-possession pursuant to Sections 1107(a) and 1108 of the Bankruptcy Code.
VI. THE DEBTOR'S IMMEDIATE LIQUIDITY NEEDS
A. Cash Position at Filing
49. As of the Petition Date, the Debtor has $11,800,000 in cash on hand. This amount is wholly insufficient to fund the Debtor's ongoing operations, satisfy post-petition obligations as they come due, pay the fees and expenses of the professionals retained in connection with this Chapter 11 case, and maintain the Debtor's manufacturing and distribution infrastructure during the pendency of this case. As detailed in the 13-week DIP Budget described below, the Debtor's projected net cash outflow in the first four weeks alone is approximately $17,000,000, which would exhaust the Debtor's existing cash reserves and leave the Company unable to continue operations.
B. Operational Cash Requirements
50. The Debtor's three manufacturing plants must continue to operate on a continuous basis throughout the Chapter 11 case. The plants cannot be shut down and restarted without incurring prohibitive costs and experiencing significant delays. Chemical manufacturing processes require continuous operation to maintain product quality, prevent degradation of in-process materials, and avoid the time-consuming and expensive process of purging, cleaning, and requalifying production lines. A shutdown at any of the three plants would also result in the loss of key customer contracts and seasonal revenue during the most critical period of the growing season.
51. The Debtor must continue to procure critical raw materials from its chemical suppliers in order to maintain production. The Debtor relies on a limited number of specialized chemical input suppliers, the top five of which are owed an aggregate of approximately $9,400,000 in pre-petition trade payables. These suppliers provide essential raw materials that are not readily available from alternative sources and, in many cases, are subject to long lead times and qualification requirements. The Debtor's Critical Vendor Motion, filed concurrently herewith, requests authority to pay up to $12,000,000 in pre-petition claims of critical vendors to maintain the supply chain and ensure uninterrupted access to raw materials.
52. Working capital demands are significantly heightened during the second and third quarters due to the seasonal nature of the agricultural chemicals business. During these periods, the Company must fund increased raw material purchases, elevated manufacturing costs associated with higher production volumes, and expanded distribution and logistics expenses. The timing of the Chapter 11 filing — at the commencement of this peak season — makes it imperative that the Debtor secure adequate post-petition financing immediately.
C. Professional Fee Obligations
53. In connection with the preparation for and commencement of this Chapter 11 case, the Debtor has retained or anticipates retaining the following professionals, each of whose fees and expenses will constitute administrative expenses of the estate:
(a) Calderwood & Harkness LLP — Debtor's bankruptcy counsel (retention application filed concurrently), Engagement No. 1020-00002. The responsible partner is Nathaniel Bower, and the billing partner is Colette Whitman. Calderwood & Harkness LLP maintains principal offices at 450 Park Avenue, New York, New York 10022, and an Iowa office at 801 Grand Avenue, Suite 3300, Des Moines, Iowa 50309.
(b) Claridge Advisory Group LLC — The Debtor's restructuring and financial advisor. The engagement is led by Nolan Ashworth, Managing Director, with support from Rebecca Liu, Director. Claridge Advisory has been responsible for the preparation of the 13-week cash flow model, the operational business plan, and the DIP Budget.
(c) Holloway & Birch LLP — The Debtor's independent auditors and tax advisors, whose pre-petition engagement continues post-petition with the anticipated approval of this Court. The engagement is led by audit partner Andrew Sorensen.
(d) Bellwether Valuation Services Inc. — An independent appraisal firm engaged to provide valuations of the Debtor's real property, equipment, inventory, and intellectual property for collateral and borrowing base purposes. The engagement is led by senior managing director Gregory Pineda.
54. In addition to the foregoing, the Debtor anticipates that U.S. Trustee quarterly fees will be incurred in connection with this case, estimated at approximately $325,000 per quarter based on the Debtor's projected level of disbursements.
55. Total restructuring professional fees projected over the 13-week DIP Budget period are approximately $16,100,000. The Debtor does not have sufficient existing cash resources to fund these professional fees without the DIP Facility.
D. Adequate Protection Payments
56. The Debtor anticipates that adequate protection payments to pre-petition secured lenders will be required pursuant to the terms of the proposed Interim and Final DIP Orders. The adequate protection package, as agreed in principle with Prairie State Bank and the DIP lenders, includes current-pay interest at the non-default contract rate on the First Lien Term Loan (i.e., SOFR plus 450 basis points). Projected adequate protection and debt service payments over the 13-week DIP Budget period total approximately $11,050,000.
E. Capital Expenditure Requirements
57. The Debtor must make minimum capital expenditures of approximately $3,600,000 over the 13-week DIP Budget period in order to maintain the safe and reliable operation of its three manufacturing plants. These capital expenditures are essential to preserving the value of the Debtor's manufacturing infrastructure and include maintenance-related equipment replacements, environmental compliance upgrades, and safety system repairs that cannot be deferred without risk to plant operations or employee safety.
58. In summary, the Debtor's immediate and near-term liquidity requirements — encompassing operating cash needs, professional fees, adequate protection payments, and capital expenditures — far exceed the Debtor's available cash resources. The DIP Facility is the only means by which the Debtor can satisfy these obligations and continue to operate its business during the Chapter 11 case.
VII. THE DIP FACILITY — OVERVIEW OF TERMS
59. Set forth below is a summary of the principal terms of the proposed DIP Facility. This summary is provided for informational purposes only and is qualified in its entirety by reference to the DIP Credit Agreement attached as Exhibit A to the DIP Motion and the proposed Interim DIP Order and Final DIP Order attached as Exhibits B and C to the DIP Motion, respectively.
A. Parties to the DIP Facility
60. Borrower. The borrower under the DIP Facility is Greenfield Agricultural Partners LLC, the debtor and debtor-in-possession in this Chapter 11 case.
61. Administrative Agent and Lead Arranger. Ironclad Capital Partners LP ("Ironclad") will serve as administrative agent and lead arranger for the DIP Facility. Ironclad is a credit-focused alternative investment firm headquartered at 600 Lexington Avenue, 34th Floor, New York, New York 10022. Ironclad manages approximately $8.2 billion in assets under management and specializes in distressed debt investing and debtor-in-possession lending across industrial and agricultural sectors. Ironclad has extensive experience providing DIP financing in complex Chapter 11 cases and is well-positioned to serve as administrative agent for a facility of this size and complexity. The key personnel at Ironclad who have been involved in the negotiation and structuring of the DIP Facility include Martin Halberstam, Managing Partner; Diana Voss, Partner and Head of Structured Credit; and Kevin Pratt, Vice President, Portfolio Management, who is serving as the deal lead.
62. Co-Lenders. The DIP lender syndicate includes two co-lenders in addition to Ironclad:
(a) Ridgeline Opportunity Fund III LP ("Ridgeline"), located at 200 S. Wacker Drive, Suite 2900, Chicago, Illinois 60606. Ridgeline is a special situations investment fund with significant experience in distressed lending. The key contact at Ridgeline is Samuel Ostrowski, Managing Director, Special Situations.
(b) Bramblewood Credit Advisors LLC ("Bramblewood"), located at 100 Federal Street, Suite 3100, Boston, Massachusetts 02110. Bramblewood is a credit-focused advisory and investment firm. The key contact at Bramblewood is Christine Morel, Principal.
63. Collateral Agent. Meridian Trust Company will serve as collateral agent under the DIP Facility, in addition to its role as indenture trustee under the Senior Unsecured Notes.
B. Facility Size and Commitments
64. The DIP Facility is a senior secured superpriority revolving credit facility in the aggregate principal amount of $175,000,000. The commitments of the individual DIP lenders are as follows:
C. Interest Rate and Fees
65. The DIP Facility bears interest at a floating rate equal to SOFR plus 850 basis points (8.50%) per annum. The DIP Credit Agreement includes a SOFR floor of 4.00%, which means that the effective minimum all-in interest rate on the DIP Facility is 12.50% (i.e., 4.00% SOFR floor plus 8.50% spread). Upon the occurrence and during the continuance of an Event of Default under the DIP Credit Agreement, the interest rate increases by an additional 200 basis points to SOFR plus 1,050 basis points.
66. The fee structure for the DIP Facility is as follows:
(a) Closing Fee. A closing fee equal to 2.00% of total commitments, or $3,500,000 (i.e., 2.00% × $175,000,000), payable upon entry of the Interim DIP Order.
(b) Unused Line Fee. An unused line fee of 0.50% per annum on the average daily undrawn portion of the DIP Facility commitments.
(c) Exit Fee. An exit fee equal to 1.00% of aggregate commitments, or $1,750,000 (i.e., 1.00% × $175,000,000), payable upon maturity or earlier termination of the DIP Facility.
D. Availability and Draw Schedule
67. The DIP Facility contemplates a two-stage draw schedule:
(a) Interim Draw. Upon entry of the Interim DIP Order, which the Debtor requests be entered within five business days of the Petition Date (i.e., on or before May 22, 2025), $80,000,000 of the DIP Facility will become available to the Debtor. This interim draw will provide the Debtor with the immediate liquidity necessary to fund operations, pay professionals, and satisfy other critical obligations during the period between the interim and final hearings.
(b) Final Draw. The remaining $95,000,000 (i.e., $175,000,000 minus $80,000,000) will become available to the Debtor upon entry of the Final DIP Order, which the Debtor requests be entered within 35 days of the Petition Date (i.e., on or before June 19, 2025).
E. Maturity.
68. The DIP Facility matures on the earliest to occur of: (a) twelve months from the Petition Date (i.e., May 15, 2026); (b) the effective date of a confirmed plan of reorganization; (c) the consummation of a sale of substantially all of the Debtor's assets pursuant to Section 363 of the Bankruptcy Code; or (d) the occurrence of an Event of Default under the DIP Credit Agreement that is not cured or waived within any applicable cure period.
F. Security and Priority
69. The DIP Facility is secured by and entitled to the following security and priority:
(a) Superpriority Administrative Expense Claim. Pursuant to Section 364(c)(1) of the Bankruptcy Code, all obligations under the DIP Facility shall constitute allowed superpriority administrative expense claims against the Debtor's estate, with priority over all administrative expenses of the kind specified in Sections 503(b) and 507(b) of the Bankruptcy Code, subject only to the Carve-Out (as defined below).
(b) First-Priority Priming Liens. Pursuant to Section 364(d) of the Bankruptcy Code, the DIP lenders shall be granted first-priority priming liens on all pre-petition collateral, including all collateral subject to the pre-petition liens of Prairie State Bank and the ABL Revolver lenders, senior in priority to all existing liens on such collateral.
(c) First-Priority Liens on Unencumbered Assets. Pursuant to Sections 364(c)(2) and 364(c)(3) of the Bankruptcy Code, the DIP lenders shall be granted first-priority liens on all assets of the Debtor that are not subject to valid, perfected, and non-avoidable liens as of the Petition Date.
G. Adequate Protection for Pre-Petition Secured Lenders
70. In exchange for the priming of their pre-petition liens, the pre-petition secured lenders (i.e., Prairie State Bank, Hawthorn National Bank, and Northland Savings Bank, F.S.B.) will receive the following adequate protection:
(a) Replacement Liens. Replacement liens on all DIP collateral, junior in priority to the DIP liens and the Carve-Out, but senior to all other liens, claims, and interests.
(b) Superpriority Administrative Expense Claim. An allowed superpriority administrative expense claim under Section 507(b) of the Bankruptcy Code, junior in priority to the DIP superpriority claim and the Carve-Out.
(c) Current-Pay Interest. Current-pay interest at the non-default contract rate on the First Lien Term Loan (i.e., SOFR plus 450 basis points), payable monthly.
(d) Monthly Reporting. The Debtor shall provide the pre-petition secured lenders with a monthly reporting package containing updated financial and operational information, including budget-to-actual variance reports, balance sheets, and cash flow statements.
H. Roll-Up of Pre-Petition ABL Obligations
71. The DIP Facility provides for the roll-up of $20,000,000 of pre-petition ABL Revolving Credit Facility obligations into the DIP Facility. This roll-up mechanism was a condition of the ABL lender group's support for the DIP Facility and the Chapter 11 filing. Prairie State Bank, Hawthorn National Bank, and Northland Savings Bank, F.S.B. — the participating lenders under the ABL Revolver — have indicated that their consent to the priming of their pre-petition liens and their support for the DIP Facility is contingent upon the inclusion of this roll-up provision. The roll-up will effectively reduce the outstanding pre-petition ABL obligations from $72,300,000 to $52,300,000 and will provide the ABL lenders with DIP-priority treatment with respect to the rolled-up amount. The Debtor believes that this roll-up is reasonable and necessary to secure the support of the ABL lender group, without which the DIP Facility could not be consummated.
I. Financial Covenants
72. The DIP Credit Agreement includes the following financial covenants, which are designed to ensure the Debtor's compliance with the DIP Budget and to provide the DIP lenders with ongoing assurance of the Debtor's financial performance:
(a) Minimum Liquidity. The Debtor must maintain minimum liquidity of not less than $15,000,000 at all times. For purposes of this covenant, "liquidity" is defined as the sum of unrestricted cash on hand plus availability under the DIP Facility.
(b) Maximum Cumulative Variance to Budget. Actual disbursements may not exceed budgeted disbursements by more than 15% on a rolling four-week basis, tested weekly. This variance test ensures that the Debtor remains on track relative to the approved DIP Budget and provides the DIP lenders with an early-warning mechanism in the event of unexpected cash outflows.
(c) Minimum EBITDA. The Debtor must maintain EBITDA of not less than negative $5,000,000 for any rolling four-week period. This floor is designed to prevent catastrophic deterioration in the Debtor's operating performance during the Chapter 11 case.
J. Milestones.
73. The DIP Credit Agreement includes the following case milestones, which establish a timeline for the key events in the Chapter 11 case:
(a) Interim DIP Order: Entry of the Interim DIP Order within five business days of the Petition Date (i.e., by May 22, 2025).
(b) Final DIP Order: Entry of the Final DIP Order within 35 days of the Petition Date (i.e., by June 19, 2025).
(c) Filing of Plan or Section 363 Sale Motion: The Debtor must file either a plan of reorganization or a motion to sell substantially all of the Debtor's assets under Section 363 of the Bankruptcy Code within 150 days of the Petition Date (i.e., by October 12, 2025).
(d) Confirmation or Sale Closing: The Debtor must obtain confirmation of a plan of reorganization or consummate a sale of substantially all assets within 270 days of the Petition Date (i.e., by February 8, 2026).
K. Carve-Out.
74. The DIP Facility includes a "Carve-Out" provision that protects estate professionals and the U.S. Trustee from being entirely subordinated to the DIP lenders' superpriority claims and liens:
(a) Pre-Trigger Carve-Out: All accrued but unpaid professional fees incurred prior to the delivery of a "Carve-Out Trigger Notice" by the DIP Agent are uncapped and excluded from the DIP lenders' liens and superpriority claims.
(b) Post-Trigger Carve-Out: Following delivery of a Carve-Out Trigger Notice, the Carve-Out includes an aggregate of $3,000,000, allocated as follows: (i) $2,500,000 for fees and expenses of estate professionals, and (ii) $500,000 for fees payable to the U.S. Trustee under 28 U.S.C. § 1930(a)(6).
L. Governing Law
75. The DIP Credit Agreement is governed by and will be construed in accordance with the laws of the State of New York, without regard to conflicts of law principles. The bankruptcy proceedings are governed by federal law as applied in the United States Bankruptcy Court for the Northern District of Iowa.
VIII. THE 13-WEEK DIP BUDGET
A. Budget Period
76. In connection with the DIP Facility, the Debtor has prepared a detailed 13-week cash flow budget (the "DIP Budget" or the "Budget") covering the period from May 15, 2025 through August 13, 2025. The DIP Budget was prepared by the Debtor's finance team under my direction and in coordination with Claridge Advisory Group LLC, the Debtor's restructuring and financial advisor. The Budget was prepared by Nolan Ashworth, Managing Director, and Rebecca Liu, Director, of Claridge Advisory, in consultation with the Debtor's management team and has been reviewed and approved by the DIP lenders.
77. The DIP Budget period may be extended in four-week increments upon approval of the DIP lenders, at their sole discretion, to the extent the Debtor requires additional time to consummate a plan of reorganization or asset sale.
B. Summary Budget Table
78. The following table summarizes the DIP Budget ($ in thousands):
79. As reflected in the DIP Budget, the Debtor anticipates total operating receipts of $129,600,000 over the 13-week period, with receipts increasing from $38,200,000 in Weeks 1–4 to $49,800,000 in Weeks 9–13, consistent with the seasonal ramp-up in sales activity during the summer application season. Total operating disbursements of $133,900,000 reflect the cost of raw materials, manufacturing expenses, distribution costs, payroll, and other operating expenses necessary to sustain the Debtor's business during this critical period.
80. Restructuring professional fees of $16,100,000 reflect the anticipated fees and expenses of the Debtor's bankruptcy counsel, financial advisor, auditors, appraisers, and other professionals engaged in connection with this Chapter 11 case, as well as the fees and expenses of professionals retained by any official committee appointed in this case. Debt service and adequate protection payments of $11,050,000 reflect the current-pay interest obligations on the First Lien Term Loan. Capital expenditures of $3,600,000 represent the minimum maintenance capital required to keep the Debtor's three manufacturing plants operational.
C. Budget Reconciliation
81. The following reconciliation summarizes the projected cash position over the 13-week DIP Budget period:
• Opening Cash (May 15, 2025): $11,800,000
• Plus: Interim DIP Draw (upon entry of Interim DIP Order): $80,000,000
• Less: Total Net Cash Outflow (13 weeks): ($35,050,000)
• Ending Cash (August 13, 2025): $56,750,000
D. Covenant Compliance Demonstration
82. As illustrated by the DIP Budget, the Debtor projects an ending cash balance of $56,750,000 after 13 weeks, which comfortably exceeds the minimum liquidity covenant of $15,000,000 at all points during the Budget period. At no point during the 13-week Budget period does the Debtor's projected liquidity fall below the $15,000,000 minimum.
83. The DIP Budget further demonstrates compliance with the 15% maximum variance test on cumulative disbursements, as the Budget is constructed with conservative assumptions regarding operating disbursements, professional fees, and capital expenditures. Additionally, the Debtor's projected operating performance is consistent with compliance with the minimum EBITDA floor of negative $5,000,000 for any rolling four-week period. Indeed, operating receipts are expected to increase through the summer season, with Weeks 9–13 projecting positive net operating cash flow of $2,300,000, consistent with the seasonal pattern of the agricultural chemicals business.
84. The DIP Budget demonstrates that the $80,000,000 interim draw is both necessary and sufficient to fund the Debtor's operations through the entry of the Final DIP Order and the initial months of the Chapter 11 case, while maintaining appropriate liquidity cushions to ensure covenant compliance and operational flexibility.
IX. PRE-PETITION LENDER CONSENT TO PRIMING
85. Prairie State Bank, N.A., in its capacity as administrative agent under the First Lien Term Loan Credit Agreement, has indicated its conditional consent to the priming of the pre-petition first liens by the DIP Facility liens. This consent is subject to the entry of the Interim and Final DIP Orders incorporating the adequate protection terms agreed upon in principle between the Debtor, the DIP lenders, and Prairie State Bank. As described in Section VII.G above, these adequate protection terms include replacement liens on all DIP collateral, a superpriority administrative expense claim under Section 507(b) of the Bankruptcy Code (junior to the DIP superpriority claim), current-pay interest at the non-default contract rate on the First Lien Term Loan, and the delivery of a monthly reporting package.
86. I have been informed by the Debtor's counsel that a formal consent letter from Thomas Whitaker, Senior Vice President, Loan Workout Group at Prairie State Bank, is expected to be delivered on or before May 20, 2025, confirming the First Lien agent's consent to the priming and the adequate protection terms. The Debtor's counsel will file such consent letter with the Court promptly upon receipt.
87. Additionally, the ABL Revolver lenders — Prairie State Bank, Hawthorn National Bank, and Northland Savings Bank, F.S.B. — have indicated their support for the DIP Facility, contingent upon the inclusion of the $20,000,000 roll-up of pre-petition ABL obligations into the DIP Facility, as described in Section VII.H above. The ABL lenders view the roll-up as an essential condition of their support and a necessary element of the adequate protection to be provided to the ABL lender group.
X. NECESSITY OF THE DIP FACILITY
A. Inability to Obtain Unsecured or Junior Financing
88. The Debtor has been unable to obtain post-petition financing on an unsecured or junior-lien basis. The Debtor's precarious financial condition — with total pre-petition indebtedness of $489,200,000, only $11,800,000 in cash on hand, and an estimated enterprise value of approximately $280,000,000 to $340,000,000 — renders unsecured credit entirely unavailable at any price. No rational lender would extend unsecured or subordinated credit to the Debtor given the existing capital structure, which is fully leveraged. There are no unencumbered assets of sufficient value to support unsecured borrowing at the scale required to fund the Debtor's operations and this Chapter 11 case. The Debtor has therefore satisfied the requirements of Section 364(c) of the Bankruptcy Code, which permits the court to authorize post-petition financing with superpriority status and liens only if the debtor is unable to obtain credit on an unsecured basis.
B. Marketing Process
89. Prior to commencing this Chapter 11 case, Claridge Advisory Group LLC, the Debtor's restructuring and financial advisor, conducted a comprehensive marketing process to solicit proposals for debtor-in-possession financing. Multiple potential DIP lenders were contacted and provided with information regarding the Debtor's business, financial condition, and financing needs. The Ironclad-led syndicate submitted the most competitive proposal and the most favorable terms available under the circumstances. The details of the marketing process are set forth in the Declaration of Nolan Ashworth, Managing Director of Claridge Advisory Group LLC, filed concurrently with the DIP Motion.
90. While the interest rate of SOFR plus 850 basis points on the DIP Facility reflects the distressed nature of the Debtor's situation and the risks associated with lending to a Chapter 11 debtor, it is within the range of market rates for DIP facilities of comparable size and risk profile in the agricultural and chemical sectors. The fee structure — including the 2.00% closing fee, 0.50% unused line fee, and 1.00% exit fee — is likewise consistent with market terms for DIP financings of this type and complexity.
C. Consequences of Denial
91. The consequences of denying the DIP Motion would be swift and devastating. Without the DIP Facility, the Debtor would be forced to cease operations within days given its current cash position of $11,800,000 and its projected net operating cash outflow of $5,900,000 in Weeks 1–4 alone. Without post-petition financing, the Debtor would be unable to procure raw materials, pay its employees, fund manufacturing operations, or fulfill customer orders.
92. A shutdown of the Debtor's three manufacturing plants would result in:
(a) The loss of approximately 2,300 jobs, including both permanent and seasonal employees, with devastating consequences for the communities in Cedar Falls, Iowa; Decatur, Illinois; and Jonesboro, Arkansas, where the Debtor is a significant employer;
(b) The destruction of the Debtor's going-concern value, as a non-operating chemical manufacturing business would have substantially diminished value relative to a going concern;
(c) The inability to serve the Debtor's customers during the critical growing season, resulting in the permanent loss of customer relationships and the diversion of those customers to competing suppliers;
(d) The spoilage or degradation of in-process chemical products and raw material inventories, resulting in environmental and safety hazards and the destruction of estate assets;
(e) The permanent impairment of the estate to the detriment of all classes of creditors, including the pre-petition secured lenders, the holders of the Senior Unsecured Notes, and the Debtor's trade creditors; and