Another bankruptcy involving bonds issued through the Arizona Industrial Development Authority was filed Tuesday along with a pre-packaged exit plan that would result in bondholder ownership of a reorganized company.
Restoration Forest Products Group, which brought the Chapter 11 case in U.S. Bankruptcy Court in Delaware, sold $112.8 million of taxable Series A senior and $86.8 million of taxable Series B subordinate sustainability-linked revenue bonds through the authority in 2022 under its former name NewLife Forest Restoration.
The filing comes as Legacy Cares’ 2023 bankruptcy case, which involved $284 million of defaulted debt sold through AZIDA in 2020 and 2021 for a participant sports venue in Mesa,
Dirk Swift, AZIDA’s executive director, did not immediately respond to a request for comment on the latest bankruptcy and the agency’s compliance with the governor’s directives.
Restoration Forest, an Arizona-based sustainable forestry and wood products manufacturer, said in court documents its inability to secure a contract with the U.S. Forest Service while it was building a sawmill financed with bond proceeds, along with problems caused by harsh winter weather in 2022 and an operational shutdown in 2020 due to the COVID-19 pandemic, led to the bankruptcy.
“In the end, the funding raised from the issuance of the 2022 bonds was not enough to cover the already over-budget cost of completing the Bellemont Facility, which is now scheduled to be completed in May 2024.” the company’s disclosure statement said.
Last May, the company, majority senior bondholder Invesco Senior Secured Management, and the bond trustee