WINCHESTER, KY — GenCanna — the hemp company with an unfinished processing plant in Graves County and an unused manufacturing space in Paducah — has filed for voluntary Chapter 11 bankruptcy.
The company announced Thursday that it has filed for Chapter 11 protection in the U.S. Bankruptcy Court in the Eastern District of Kentucky.
The news comes after creditors filed a petition in the federal court last month to initiate involuntary bankruptcy proceedings. Three companies — Pinnacle Inc., Crawford Sales Inc., and Integrity Architecture PLLC — filed the petition in an effort to receive payment of debts owed by GenCanna.
In a news release, GenCanna says filing for voluntary bankruptcy will allow the company to continue operations while going through a reorganization plan that could include debt refinancing or the potential sale of the company.
Thursday's release includes a statement from GenCanna CEO Matty Mangone-Miranda, which reads:
"We are taking this action in order to position our business for success in a highly dynamic and rapidly evolving industry.
"While this is certainly not the outcome we desired, the bankruptcy process gives us the ability to move forward in a way that allows us to best continue operations and serve customers as we work through our reorganization, resolve an outstanding legal dispute involving our Western Kentucky facility, navigate an uncertain regulatory environment and adjust our annual operating costs to better match the landscape.
"Through this restructuring, we plan to address certain structural issues that we could not fix on our own. We are grateful for the continued support of our existing senior lender, who recognizes the strength of our brand, and we will continue to work tirelessly on behalf of our employees, farmers, and vendor partners."
Dozens of liens have been filed related to that western Kentucky facility — the Mayfield property — by contractors who say they have not been paid for their work at the facility. A contractor also filed a foreclosure complaint against that property.
U.S. Rep. James Comer says he is disappointed by the way the company has been handling its financial issues, the Courier Journal reports. The Louisville newspaper reports that Comer said "For better or worse, GenCanna has been seen as the leader of the CDB industry in Kentucky. And GenCanna has certainly given a black eye to the industry," and that he is "very disappointed in how GenCanna has left so many contractors from my district high and dry with their plant, when they just walked away from them in Mayfield, Kentucky."
In December, GenCanna laid off about 60 employees in Winchester, Kentucky — the location of the company's headquarters.