Under a proposed Chapter 11 Plan of Liquidation, the NewAge Beverages plant in Colorado will be sold off.
The 61-page document, which was filed on November 30, shows how NewAge’s Chapter 11 bankruptcy plan will be changed.
NewAge, Ariix, and Morinda will all stay the same. However, Legacy Distribution Group will buy NewAge Beverages for $4.5 million.
This is from the Chapter 11 Plan of Liquidation that NewAge wants to use;
NewAge is the parent company of two wholly-owned, non-debtor subsidiaries: NABC, Inc. and NABC Properties, LLC (the “NABC Entities”). Together, they run a direct store distribution business (the “DSD Business”) that sells drinks, snacks, and other products to grocery stores, big-box retailers, and convenience stores.
In Colorado, the DSD Business is open for business.
NewAge Beverages isn’t named, but based on the description of the business model, I think it’s the “DSD Business” that’s being talked about.
On November 11, 2022, the Debtors filed a “DSD Sale Motion” asking for an order (I) allowing the Debtors to sell property of NewAge’s wholly-owned, non-debtor subsidiaries, (II) allowing the Debtors to assume and assign a lease, and (III) giving other related relief.
The DSD Sale Motion asked for approval of the sale of the DSD Business to Legacy Distribution Group, LLC (“Legacy”) for $4,500,000, subject to net working capital adjustments as described in the APA that was attached to the DSD Sale Motion.
The DSD Sale Motion also wanted Legacy to take over and take over responsibility for one of NewAge’s commercial leases at 18245 East 40th Avenue, Aurora, Colorado 80011.
On November 23, the court agreed to NewAge’s request.
CBD Global Sciences, a Canadian company, is the owner of Legacy Distribution Group (dba Global Sciences).
According to a press release from September 9;
The New Age DSD operation has been helping people in Colorado for more than twenty years. It provides the best service in its field to more than 5,000 outlets and has helped start and grow some of the biggest brands in the business.
The DSD started out small, but is now what New Age, Inc. calls “one of the largest independent distributors in the country.” It has hundreds of employees and is proud to keep this great “Legacy” going.
“This is a good thing for both Legacy Distribution Group and the Operations Team at the DSD,” said Brad Wyatt, CEO of Global Sciences.
Our companies are working together in the Colorado market to give the vendors and stores the best service in the industry.
I chose this part of NewAge’s Chapter 11 plan because the Colorado bottling facility is a key part of how its MLM business gets its products to customers.
Before filing for Chapter 11, NewAge and Global Sciences have been doing business together since at least 2020.
I’m guessing that there’s a business deal in place to make sure that NewAge, Morinda, and Ariix can continue to move products through the Colorado facility, even though it hasn’t been made public.
The only part of the Chapter 11 plan that we haven’t talked about yet is the sale of the NewAge Beverages building. Specifically, what led up to the bankruptcy, such as alleged acts of sabotage and blackmail.
In the future, the Chapter 11 Plan of Liquidation for NewAge needs to be voted on, and then the court will either approve it or not. This will take until the first quarter of 2023.