We are advising Mastronardi Produce and Mastronardi Berea in connection with AppHarvest’s chapter 11 proceedings

Davis Polk is advising Mastronardi Produce Limited in its individual capacity as a counterparty to a marketing agreement and Mastronardi Berea LLC as the landlord of a greenhouse facility in Berea, Kentucky, in connection with the prearranged chapter 11 restructuring of AppHarvest Products, LLC and certain of its affiliates (collectively, “AppHarvest”). AppHarvest filed for chapter 11 bankruptcy protection on July 23, 2023, in the United States Bankruptcy Court for the Southern District of Texas. The company, Mastronardi Produce, Mastronardi Berea and a secured lender of AppHarvest entered into a restructuring support agreement (RSA) on July 24, 2023.

The restructuring contemplated under the RSA and proposed plan of liquidation includes a sale process for the company’s greenhouse facilities in Morehead, Richmond and Somerset, Kentucky. In conjunction with the RSA and proposed plan, Mastronardi Berea entered into a settlement agreement with AppHarvest, whereby Mastronardi Berea will acquire certain assets and liabilities associated with the Berea facility from AppHarvest (the “Berea Transfer”). Further, the RSA contemplates that CEFF II AppHarvest Holdings, LLC (“Equilibrium”) shall serve as the stalking horse purchaser for the Morehead and Richmond facilities. An affiliate of Mastronardi Produce has executed an agreement with Equilibrium providing that Equilibrium will enter into a lease agreement with respect to the Richmond and Morehead facilities with Mastronardi Produce USA, Inc. or an affiliate, in the event that Equilibrium is the successful bidder for those properties.

On July 26, 2023, AppHarvest obtained all of the “first day” relief it sought before the bankruptcy court, including interim approval of the Berea Transfer.

Prior to the bankruptcy, Davis Polk also advised Mastronardi Berea LLC with respect to the acquisition and immediate leaseback of the Berea facility to AppHarvest.

Mastronardi Produce Limited is a leading greenhouse grower and marketer of gourmet fruits and vegetables in North America. Mastronardi grows and markets nationally recognized products under the SUNSET brand, including Campari, Flavor Bombs and Angel Sweet tomatoes.

AppHarvest, Inc. is an applied technology company developing and operating some of the world’s largest high-tech indoor farms.

The Davis Polk restructuring team includes partner Eli J. Vonnegut, counsel Jon Finelli and Jonah A. Peppiatt and associates Hailey W. Klabo and Ethan Stern. The real estate team includes partner Brian D. Hirsch and counsel Lawrence R. Plotkin. The corporate team includes partner Leonard Kreynin and counsel Daisy Wu. Partner Ethan R. Goldman is providing tax advice. All members of the Davis Polk team are based in the New York office.