WEST DES MOINES, Iowa – Today, Choice Genetics USA, LLC (CGUSA) jointly filed a plan of reorganization (Plan) with the Official Committee of Unsecured Creditors in the case. The Plan proposes to pay all creditors in full, thus providing a quick exit from its Chapter 11 reorganization proceeding.
Because of an unexpected and unfavorable decision by an arbitration panel on January 31, 2014, CGUSA filed a Chapter 11 reorganization case on February 13, 2014 in order to assure the continuation of its business, and give it time to negotiate a resolution of a contract dispute. CGUSA has continued to operate business as usual since the filing, with no interruptions in farm operations, payments to suppliers, the R&D program, or supply to its customers.
The arbitration procedure was initiated in 2012 by Scidera, Inc. (Scidera), who claimed rights under a technology licensing contract executed in 2004 by its original parties, Monsanto Company and MetaMorphix, Inc. (MMI). CGUSA became a party to the contract after it acquired the Monsanto Choice Genetics business in 2007. In 2011 – 2012, Scidera claimed to have acquired certain assets of MMI after MMI filed bankruptcy in 2010.
In addition to a monetary award, the arbitration decision included other provisions which CGUSA interpreted as essentially rewriting the terms of the contract, therefore causing an extraordinary challenge for CGUSA to operate within its business model under the new interpretation of the contract.
CGUSA is excited to announce that it has reached an agreement on the terms of a settlement with Scidera, which is incorporated in the Plan. The Plan, which is subject to approval in the reorganization case, provides for a buyout/termination of the contract, allowing CGUSA to continue its business with full rights to all of its lines.
Source: Choice Genetics