Case Summary: Plenty Chapter 11

Business Description

Headquartered in San Francisco, CA, Plenty Unlimited Inc., along with its Debtor⁽¹⁾ and non-Debtor affiliates (collectively, "Plenty" or the "Company"), is an agricultural technology company specializing in indoor vertical farming. The Company aims to provide year-round fresh produce using controlled environments and advanced technology to overcome traditional agricultural limits.

• Plenty developed a proprietary, automated farming platform featuring 20- to 30-foot vertical grow towers designed to maximize crop density.
• The Company's farms use hydroponics, LED lighting, and AI-driven climate control to grow produce pesticide-free, claiming yields up to 400 times higher than traditional field farming while using less water and land.

Backed by nearly $1 billion in venture funding from investors including SoftBank, Walmart, and One Madison Group, Plenty positioned itself as an AgTech innovator, focusing on robotics, AI monitoring, and proprietary plant genetics.

• In late 2024, operational losses and market headwinds prompted a strategic shift away from leafy greens, with the Company refocusing exclusively on strawberry production at its new Virginia facility.

The Debtors filed for Chapter 11 protection on Mar. 23 in the U.S. Bankruptcy Court for the Southern District of Texas. As of the Petition Date, the Debtors reported $100 million to $500 million in both assets and liabilities.

⁽¹⁾ For a complete list of Debtor entities, see the organizational structure chart below.

Corporate History

Founded in 2014 by Matt Barnard, Nate Mazonson, Jack Oslan, and Nate Storey, Plenty aims to reshape the global food supply chain by tackling issues such as limited arable land, climate-driven risks, and rising consumer demand for sustainable, year-round fresh produce.

The Company has secured approximately $961 million in total funding across eight rounds, most recently receiving capital through a grant round on February 2, 2023.

Expansion and Pivot

• On February 2, 2023, Plenty announced the development of the world's largest vertical farming research center in Laramie, WY, significantly expanding its R&D capabilities. The project received major backing, including over $20 million in state funding.
• On May 18, 2023, Plenty opened its first commercial-scale vertical farm in Compton, CA. The facility was designed to produce up to 4.5 million pounds of leafy greens annually, supplying partners including Bristol Farms, Walmart, and Whole Foods Market.
  • Plenty halted commercial operations at the facility in December 2024 after continued losses and no clear path to profitability, shifting its focus exclusively to strawberry production at its Virginia location.
• On September 24, 2024, Plenty opened the world's first high-volume vertical strawberry farm in Richmond, VA, developed in partnership with Driscoll's. This facility marked the initial phase of a planned $300 million campus investment.

Organizational Structure

• Major equity holders pre-filing included SoftBank (46.8%), One Madison Group (18.7%), and Walmart (12.8%).

Operations Overview

Plenty has consolidated operations around two retained sites: its vertical strawberry facility in Richmond, VA, and its R&D center in Laramie, WY. The Company has exited California-based operations following ongoing losses and liquidity constraints, aligning with a strategic pivot toward higher-value crop production.

• South San Francisco, CA (Former HQ & Pilot Facility): Leafy greens R&D and pilot production. Operations ceased in early 2023. Debtors are seeking to reject two leases and a sublease tied to this location in Chapter 11.
• Laramie, WY (R&D Center): Multi-crop plant science facility supporting development of proprietary IP and vertical tower farming systems. Site has supported trials across dozens of crops and hundreds of cultivars.
• Compton, CA (Farm 1): Commercial leafy greens farm opened in May 2023. Supplied Walmart and Whole Foods but failed to reach profitability. Ceased operations by December 2024. Lease rejection motion filed.
• Richmond, VA (Farm 2): Vertical strawberry facility opened late 2024 in partnership with Driscoll’s to produce Plenty Sweet™ strawberries. Expansion phase halted in November 2024 amid liquidity issues.
• Plenty Japan KK: Dormant non-Debtor affiliate. Wholly owned entity with no current operations.

Technology, Workforce & Tax Attributes

• Plenty holds nearly 200 patents covering its modular vertical growing systems, AI-driven controls, robotics, and plant genetics.
• The Company's workforce was reduced to approximately 66 non-union employees following the Compton closure and broader cost-cutting efforts.
• Crucially, the Company possesses significant tax assets, including estimated federal NOLs of $662 million (as of Dec. 31, 2024) and state NOLs of $605 million (as of Dec. 31, 2023), plus $17 million in R&D tax credits (as of Dec. 31, 2023). Preserving these is a key goal of the restructuring.

Prepetition Obligations

Top Unsecured Claims

Events Leading to Bankruptcy

Plenty's Chapter 11 filing stems from a confluence of persistent operating losses, a sector-wide downturn in vertical farming, and a resulting liquidity crisis exacerbated by its capital-intensive growth strategy.

Operational Losses and Market Headwinds

• Despite raising nearly $1 billion in capital, the Company consistently burned through cash, notably at its unprofitable leafy greens farm in Compton, CA.
• The high-profile collapses of industry peers like AeroFarms Inc. and AppHarvest Inc. further chilled investor sentiment, making additional fundraising difficult amid rising interest rates and market volatility.

Liquidity Challenges and Strategic Pivot

• Facing declining cash reserves in late 2024, Plenty executed a strategic pivot, exiting the leafy greens market via the closure of its Compton facility and shifting focus to higher-margin strawberries produced at its newly launched Virginia farm.
• Funding constraints also forced the Company to halt construction on an expansion phase at the Virginia facility in November 2024, leaving contractors unpaid and leading to mechanic's liens against the property. Key claimants include general contractor Whiting-Turner (asserting ~$20 million) and Electrical Controls & Maintenance (~$7.7 million), among others.

Prepetition Restructuring Efforts

• Attempts from mid-2023 to raise capital or find a buyer via investment banks proved unsuccessful.
• In January 2025, the Plan Sponsors agreed to support a restructuring and subsequently provided an $8.7 million bridge loan in February to fund operations during ongoing negotiations.

Chapter 11 Filing and Path Forward

• The Debtors filed for Chapter 11 protection on March 23, 2025, aiming to implement a pre-arranged restructuring supported by the Plan Sponsors.
• DIP Financing: Secured interim court approval for $20.7 million in new financing from the Plan Sponsors to fund operations during the case.
• Dual-Track Process: Plenty is simultaneously pursuing confirmation of a reorganization plan and marketing its assets for sale.
  • Reorganization Plan: Led by Plan Sponsors, it includes a $30 million rights offering, new sponsor investment, a settlement for key lienholders (offering ~28.5% cash recovery plus participation rights), cancellation of existing equity, and preservation of significant tax attributes (~$662 million NOLs).
  • Asset Sale: Plan Sponsors act as the stalking horse bidder, primarily offering to swap their DIP loan for the Company's core assets. An auction process could result in a higher bid.
• Expedited Timeline: Court milestones target plan confirmation or sale approval by late May 2025, reflecting tight liquidity. Plenty continues operating its main Virginia farm and Wyoming R&D center.

DIP Budget

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