ACA Management Group

Agriculture

Agriculture Related Engagements

Led by Diedrich Von Soosten, the firm has developed a growing specialty practice providing consulting services to borrowers and lenders in the various aspects of the agriculture industry. Von Soosten's expertise in this area was recognized by the Turnaround Management Association's (TMA) Atlanta Chapter in 2003 when his work with a client won Turnaround of the Year.

Patrick Farms Partnership

A 5,000 acre grower/packer/shipper of greens and other produce crops. Engaged by the principals at a time when accounts were overdrawn on a regular basis and the principals were concerned about the farm's ability to continue its harvest. The farm suffered significant losses over the past several years and is highly leveraged.
Action & Results

Ceased all disbursements for a number of days to allow bank overdrafts to be repaid and initiated strict controls over cash disbursements.
Developed and implemented a detailed cash budget to micro-manage the farm's cash on a daily basis.
Revised the crop plan to reduce acreage farmed and allow the farm to concentrate on its core crops.
Terminated sales force and outsourced the sales and marketing function to a national produce marketing firm.
Hired a CFO.
Reduced permanent employee headcount.
Initiated discussions with all secured creditors and key unsecured creditors to secure their support of the farm's reorganization.
Planned and executed the farm's Chapter 11 filing.
The farm is currently continuing its operations in Chapter 11.

Zappala Farms, Inc. (Cato, NY)

Zappala, a grower shipper of both sweet and storage onions entered bankruptcy in July, 2007 after it was unable to obtain additional financing to harvest and pack its crops without the protections afforded to a DIP lender. Engagement commenced in August, 2008, when the farm was without liquidity and its DIP lender was unwilling to make additional advances.

Action & Results

A detailed daily cash flow was developed through careful analysis of the farm's operations including harvest rates, harvest costs, packing costs, projected pack out losses, overhead expenses and other bankruptcy commitments.
Developed a monitoring process for the DIP lender which included variance analysis, status reports, and weekly update calls.
The DIP lender gained a better understanding of its collateral and exposure and resumed making advances as a result. The harvest was completed and the DIP lender was paid in full.
Additional analysis revealed that the farm was unlikely to arrange financing to fund future harvests and a decision was made to sell the assets of the farm as a going concern.
Prepared an offering memorandum and solicited bidders for the farm's assets under section 363 of the bankruptcy code.
Working with the debtor's attorney, negotiated the asset purchase agreement and the distribution of proceeds with the secured and unsecured creditor groups. The sale resulted in a higher than expected pay out to both secured and unsecured creditors.

Grant Family Farms (Wellington, CO)

A two thousand acre grower shipper of organic produce (primarily leafy greens) entered bankruptcy in 2006 shortly after its local lender froze its bank accounts. The operation had been severely impacted by the spinach e coli recall. Spinach was its largest cash crop and the recall essentially took it out of the market for nearly six weeks. During the bankruptcy case, in 2007 the farm endured a devastating storm that took it out of production for the better part of 5 weeks.

Actions & Results

Was able to guide the farm through this financially challenging period by developing a detailed cash budget and micro managing cash.
New financing was sourced to fund operations.
A Plan of Reorganization was presented and unanimously approved by all classes of its creditors and confirmed by the court allowing the farm to successfully emerge from bankruptcy.
The farm is now completing its 2010 harvest and expects to continue its farming operations in the future.

Bland Farms (Glenville, GA)

A large grower shipper of sweet onions located in Glenville, Georgia. In November 2001, it filed a Chapter 11 proceeding. Among other things Bland was suffering poor crop yields, very low pack out yields, and was very highly leveraged.

Actions & Results

Development of detailed cash budgets to understand sources, uses, and timing of cash flows. Micro management of cash to assure disbursements were limited to critical items and that appropriate collection procedures were implemented.
Corrective actions were implemented in the field and packing operations.
New financing was arranged to enable the company to emerge from bankruptcy in 2004.
The company has repaid all of its bankruptcy related indebtedness and has since grown its business fivefold.
This engagement earned the Turnaround of the Year Award from the Atlanta Chapter of the Turnaround Management Association for Diedrich Von Soosten.

Nut Processor Corp. (Southeast, US)

Engaged by an asset based lender to monitor the collateral of a processor of agricultural products. In addition to monitoring collateral, an in depth review and analysis of the projections upon which the transaction was based was undertaken. It was determined that certain aspects of the projections were predicated upon flawed logic and incorrect assumptions. As a result the projected cash flow was overstated.

Actions & Results

Prepared new projections which revealed significant issues in logic in the original projections. The new projections were adopted by the company and the lender which were used to monitor the business going forward.
Collateral was monitored and projections were updated continually with a focus on the company's ability to supply key customers with whom it had supply contracts to assess the impact on receivables if it failed to perform. Product purchases were closely monitored.
There was frequent communication with the asset based lender, company management, and the investment group to help avoid the development of an adversarial atmosphere.
Ultimately, the transaction was refinanced and the asset based lender was paid in full.