Agway reveals Chapter 11 plans; Maine dealers not affected

DEWITT, N.Y. – Agway Inc. announced plans Monday to file for Chapter 11 bankruptcy reorganization in an effort to keep its businesses operating while it tries to manage its debt.

The DeWitt-based company said it would file reorganization petitions also for subsidiaries including Agway Feed and Nutrition, Agway Agronomy, Seedway, Feed Commodities International, Country Best Produce, CPG Nutrients, Agway CPG Technologies and Agway General Agency on Tuesday in U.S. Bankruptcy Court in Utica.

Four subsidiaries excluded are Agway Energy Products LLC, Agway Energy Services Inc., Agway Energy Services-PA Inc. and Telmark LLC, the company said. The approximately 550 Agway dealer stores in the Northeast are separately owned and also won’t be included in bankruptcy filings.

“They have the Agway name but they’re not affiliated with Agway,” said Stephen Hoefer, vice president of public affairs.

Agway said it would seek immediate court approval to keep paying wages and benefits to some 3,600 employees, most in the greater Syracuse area. While it continues trying to sell Telmark, Agronomy and Seedway subsidiaries as announced in March, no major layoffs were planned.

The company lost $98.2 million in the fiscal year ending June 30, saying $85.4 million was related directly to the sale of discontinued operations, on sales of $899 million.

This year the company sold Agway Sunflower and Agway Insurance, Hoefer said. The company’s total listed debt is $478 million, he said.

Agway Energy Products, which sells home heating fuels in the Northeast, reported a profit of $10.5 million on sales of $534 million.

“Our businesses have not generated enough cash flow to support that level of debt that we have,” Hoefer said.