Tuesday, May 21, 2024

Huge Global Coffee Supplier to Liquidate in Chapter 11 Bankruptcy – CoffeeTalk


Coffee companies have faced financial difficulties in recent years, leading to bankruptcy and sometimes closures. Seattle-based Tully’s filed for Chapter 11 bankruptcy in 2013, and its owner Global Baristas was forced out of business by another bankruptcy and a permanent injunction by Keurig in 2018. Chinese coffee company Luckin filed Chapter 15 bankruptcy in 2021, seeking foreign recognition of its Cayman Islands scheme of arrangement. Many local coffee roasters have filed Chapter 11 in recent years, likely due to stiff competition from large chains like Starbucks and Dutch Bros.

Netherlands-based global coffee bean supplier Mercon Coffee Corp. filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of New York to seek a sale of its assets, wind down its operations, and pursue a liquidation plan. The debtor is also seeking $40 million in debtor-in-possession financing from its prepetition lenders. Mercon reported less than $11.8 million in cash on hand and $363.3 million in funded debt obligations, including $7.5 million owed to Starbucks. After a strategic review of the company’s business, Mercon decided to exit the coffee business and pursue an orderly sale of its assets.

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