Each bankruptcy affects a different person or entity differently, but all have the same objective: to restore debtors to a more favorable financial position after the process than before. Moreover, the impact of a bankruptcy not only extends beyond debtors but also those who share a relationship with them. Kalera Inc., a vertical farming company with headquarters in Orlando, Florida, recently filed a voluntary petition for chapter 11 bankruptcy in the southern district of Texas.
“Debtor-in-possession” status permits it to continue to operate
Stocks for Kalera, Inc., have plummeted by almost 100% in value this year. Shares of the parent company, Kalera PLC, had dropped sharply recently as well. The company will retain status as a “debtor in possession.” This status demands that the debtor perform multiple duties that are relatively the same as those of a trustee. These include accounting for property, examining and objecting to claims, hiring attorneys and professionals to assist and filing informational reports.
One lender has agreed to provide $5.1 million in debtor-possessor financing, which is subject to approval of the bankruptcy court. By filing various motions, the company can continue its ordinary course of business without disruption. The court-supervised process will permit Kalera to evaluate options, which may include a sale of its units or assets.
Success within the bankruptcy system involves compliance with deadlines, duties and demands. Debtors, whether large companies or individuals, require support and substantive knowledge to navigate the process. Attorneys who understand bankruptcy’s purpose and objectives can offer guidance.