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Business and Distress:

• Operations: Formed by a 2017 merger, Harvest Sherwood was a major U.S. food distributor ($4B revenue, 14 centers, 32M pounds weekly). By petition date, operations ceased, with most inventory sold ($140M, 91% recovery), employees terminated (~1,500), and all but the Dallas facility exited. (D.I. 14 (First Day Declaration), p.5–7, p.20–21.
• Challenges: Rising costs, volatile prices, and consumer shifts strained margins. A December 2024 Sprouts Farmers Market self-distribution move ($42M withheld) and a January 2025 SEAFAX downgrade triggered liquidity issues, leading to a February 2025 winddown (D.I. 14, p.16–19).
• Prepetition Efforts: Advisors (Sidley Austin, Houlihan Lokey, Meru, Hilco Global) explored sales (63 parties contacted, bids unactionable) and financing, reducing receivables from $345M to $87M and selling five centers (D.I. 14, p.17–20).

Capital Structure:

• Liabilities: $323.5–$558.5M, including:
  
  • Secured ABL: $79.1M.
  • Burford Capital: $35–$70M (unsecured, Anti-Trust proceeds).
  • Unsecured Note: $9.4M.
  • Trade Claims: $200–$400M (midpoint $300M) (D.I. 14, p.12).
• DIP Financing: $105M ($25.9M new money, $79.1M roll-up), with $5M interim funding. (D.I. 108 (DIP Financing Motion), p.2).

Litigation Assets:

• Anti-Trust: $1.1B claims against pork, chicken, beef producers (trials 2025–2026).
• Sprouts: $42M breach-of-contract.
• Goodman: Several million for fraud (D.I. 14, p.14–15).
• Burford claims $35–$70M of Anti-Trust proceeds, disputed by Debtors (D.I. 14, p.13, p.22).

Chapter 11 Objectives:

• Complete winddown, monetize Dallas facility, collect $87M receivables, and pursue litigation, likely via a trust, with ABL Lender and Ad Hoc Creditor Committee support ($27M claims) (Doc. 14, p.11, p.21).
• First-day motions ensure operations (e.g., $430K critical vendors, Carve Out for fees) (D.I. 14, p.24–39; D.I. 108, p.19–21).
• A Michigan Chapter 7 petition was dismissed (D.I. 14, p.22–23).

Timeline:

• Plan Filing: By September 2, 2025 (~4 months, web search).
• Confirmation: October–December 2025 (5–7 months), likely using a litigation trust.
• Emergence: December 2025–February 2026 (7–9 months), supported by winddown completion and creditor alignment, though litigation trials (2025–2026) may delay without a trust (D.I. 14, p.21–22; D.I. 108, p.13).

DIP Objections

• Ad hoc group 
  
  • Committee should investigate prepetition liens
  • No rollup. Interest and fees only on interim portion until final approval
• 1970 Group
  
  • No rollup
• Sprouts

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$25,896,170.16 of new money DIP loans, $5,000,000 of which shall only be made available upon entry of the Interim Order, with the remainder available upon entry of the Final Order

subject to entry of the Final Order, a roll up and conversion into DIP Obligations (as defined below) of the remaining $79,103,829.84 of Prepetition Obligations (the “Roll-Up DIP Loans” and, together with the New-Money DIP Loans, the “DIP Loans”)

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