HyLife unit gets conditional approval of plan, disclosure statement

By Sarah Lizee

Olympia, Wash., Aug. 18 – HyLife Foods subsidiary Tritek International Inc. received conditional approval of its Chapter 11 plan of liquidation and disclosure statement, according to an order filed Friday with the U.S. Bankruptcy Court for the District of Delaware.

The voting deadline is 5 p.m. ET on Sept. 28.

The confirmation hearing is scheduled for Oct. 5.

As previously reported, the U.S. trustee overseeing the case objected to the plan, mainly over its proposed releases, but the objection was overruled.

Under the plan, holders of priority non-tax claims and other secured claims are expected to be paid in full.

Holders of prepetition loan claims will receive their pro rata share of sale distribution proceeds and other amounts. This is expected to lead to a recovery of about 29.8%. There are about $210.08 million of estimated prepetition loan claims.

Holders of general unsecured creditors will receive their pro rata share of a distribution pool, provided that proceeds of any avoidance actions will be distributed only to the holders of general unsecured claims of the debtors on behalf of whose estate, whether in the name of the debtor or any party acting on behalf of the debtor, the respective avoidance action is asserted.

The distribution pool will include unencumbered cash, including proceeds of loans made under the company’s debtor-in-possession credit agreement remaining after payment of first-tier claims.

This is expected to lead to a 1.1% to 7.1% recovery for holders of $42 million Windom claims, and a recovery of zero to 100% for $200,000 of Canwin claims.

Holders of intercompany claims and interests will not receive any distribution.

The company recently closed the sale of its assets to Premium Iowa Pork, LLC for $14 million. The company also closed the sale of feeder pigs and hogs to AgriSwine Alliance, Inc., and two real estate parcels of about 111 acres and a residential duplex to Compeer Financial PCA and Compeer Financial FLCA.

HyLife Foods is a pork processor based in La Broquerie, Man. U.S.-based subsidiary Tritek filed Chapter 11 bankruptcy on April 27 under case number 23-10520.

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