Javo® Beverage Co., Inc., a supplier of dispensable coffee and tea-based beverages to the foodservice industry, announced it will file a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. In conjunction with the filing, the company entered into a binding plan commitment letter agreement with Coffee Holdings, LLC, its largest investor, to co-sponsor a prearranged plan of reorganization that they intend to file by Feb. 7, 2011. The restructuring transaction embodied in the plan will significantly deleverage the company's capital structure and provide the working capital the company needs to continue to service its customers and build its business.
Holdings will provide debtor in possession financing of up to $3.15 million, allowing the company to continue its operations, and additional exit financing to properly capitalize the company that today services thousands of beverage locations in the U.S.
In addition to the filing of the Chapter 11 case, Javo has filed for the bankruptcy court's consideration several "first day" motions on an expedited basis, concerning its employees, critical vendors, and customer pricing and other programs in order to be able to continue to operate in the ordinary course through the bankruptcy proceeding.
"This is an unfortunate but necessary means of right sizing our balance sheet and capitalization so that our underlying business can thrive. We want to assure all of the customers, suppliers and business partners who have supported us to this point that we intend to continue to supply quality products and, in general, operate the business in a normal fashion during the bankruptcy proceedings," said Stan Greanias, CEO of Javo® Beverage Co. in a prepared statement.
The company expects confirmation of the plan of reorganization by May 1, 2011.
For further information, visit the company's restructuring Website at www.kccllc.net/JavoBevCo.
