A federal bankruptcy judge has approved the sale of the bulk of the assets for GenCanna Global, a hemp processor and CBD product manufacturer based in Winchester, Kentucky, to MGG Investment Group, a New York-based, private direct lender and one of GenCanna’s creditors.
The deal, valued at $77 million, allows MGG Investment Group to recoup its investment, Law 360 first reported.
GenCanna Global did not immediately respond to Hemp Industry Daily’s request for comment.
GenCanna Global filed a petition on Monday to convert the Chapter 11 bankruptcy case to a Chapter 7 bankruptcy, meaning that the case would go from being a reorganization to a liquidation of assets. In Chapter 7, companies are required to sell their assets to pay as many creditors as possible.
GenCanna’s Chapter 11 filing on February 4 followed involuntary Chapter 11 bankruptcy petitions filed in January by companies owed money by the Winchester, Kentucky-based firm:
- Crawford Sales.
According to the Chapter 11 bankruptcy case file, privately held GenCanna owed $100 million to $500 million to 50-99 creditors. GenCanna says it has assets in the same range.
MGG Investment Group granted a $65 million loan to Denver-based CBD extractor Mile High Labs, which closed on April 23. Mile High Labs is using the proceeds to pay hemp farming partners, Bloomberg reported.
The lender specializes in lower-middle market companies with $10 million to $40 million in earnings. The company’s website said it excels at “investments in complex and special situations that require distinct underwriting expertise.”