NewAge’s contested bid procedures approved, with modifications

By Sarah Lizee

Olympia, Wash., Sept. 21 – NewAge, Inc.’s motion seeking approval of proposed bid procedures for its assets was approved by the U.S. Bankruptcy Court for the District of Delaware on Wednesday, with some modifications made to the terms of the sale process.

As previously reported, the motion had drawn objections from the U.S. trustee overseeing the case and the official committee of unsecured creditors. Both expressed concerns with the timeline and the stalking horse agreement.

The stalking horse is prepetition and debtor-in-possession financing lender DIP Financing, LLC, which has offered to credit bid the company’s secured debt.

Regions 3 and 9 U.S. trustee Andrew R. Vara had said in his objection that he believes the principal of the lender, John Wadsworth, is an insider of the debtors. As such, heightened scrutiny is required in considering the reasonableness of the terms of the proposed bid procedures and their implications on other creditors.

However, following a Tuesday hearing on the bid procedures, the stalking horse bidder’s offer has been modified to include $1.5 million for general unsecured creditor recoveries.

Additionally, the timeline was modified so that the bid deadline is 4 p.m. ET on Oct. 6, an auction, if needed, will be held on Oct. 7, a sale hearing will take place on Oct. 11, and the sale will close by Oct. 13.

Under the original bid procedures, bids would have been due by 4 p.m. ET on Oct. 4, the auction would have been held on Oct. 5, the sale hearing would have taken place on Oct. 7, and the sale would have been set to close by Oct. 11.

The U.S. trustee also took issue with the $375,000 expense reimbursement and 2.5% breakup fee under the stalking horse agreement, but those bid protections remain in the modified bid procedures.

The Midvale, Utah-based direct-to-consumer organic and healthy products company filed bankruptcy on Aug. 30 under Chapter 11 case number 22-10819.

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