Norpac Foods DIP loan agent proposes two-week forbearance agreement

By Caroline Salls

Pittsburgh, Nov. 4 – Norpac Foods, Inc. administrative agent and lender CoBank, ACB requested approval to enter into a forbearance agreement with the company, according to a motion filed Friday with the U.S. Bankruptcy Court for the District of Oregon.

CoBank said Norpac’s debtor-in-possession financing matured on Oct. 31.

In addition, the lender said Norpac has not sold substantially all of its assets or secured confirmation of a Chapter 11 plan.

The company is in default under the DIP financing order, the motion said.

As a result of Norpac’s failure to sell all or substantially all of its assets by Oct. 31 and other events of default, CoBank said it is entitled to relief from the automatic stay to enforce its rights, and it intends to seek relief from the stay while it evaluates its options regarding the default.

However, CoBank said it believes that it would be appropriate to provide for a brief two-week forbearance period for the Norpac debtors to discuss the potential of alternative sales to other buyers and to provide for an orderly process if other sales are not viable.

The proposed forbearance agreement allows Norpac to use cash collateral as long as it is in compliance with a specified provision of its credit agreement and no forbearance termination event has occurred.

Salem, Ore.-based Norpac Foods is a grower-owned cooperative focused on processing frozen vegetables and fruit. The company filed bankruptcy on Aug. 22 under Chapter 11 case number 19-62584.

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