Stabilized rice bran (SRB) specialist NutraCea has finally paid off all of its creditors 14 months after emerging from Chapter 11 bankruptcy protection.
Chief executive John Short said the firm had now met all of its obligations under the terms of a restructuring process approved by the US Bankruptcy Court.
“We restructured our business, repaid all creditors in full and protected the interests of the shareholders who invested in NutraCea prior to the bankruptcy filing.”
Bankruptcy counsel: An ‘extraordinary outcome’
The firm’s bankruptcy counsel, S. Cary Forrester, of Forrester & Worth, in Phoenix, Arizona, added: "This is an extraordinary outcome. In the vast majority of Chapter 11 filings, the pre-petition owners lose most or all of their ownership interests and unsecured creditors receive pennies on the dollar.
“In fact, according to one study of bankruptcy outcomes, less than 10% of Chapter 11 debtors confirm and complete a plan of reorganization. In this case, NutraCea not only exited Chapter 11 intact and paid all of its debts in full, but it did so in a way that allowed its shareholders to retain 100% of their ownership interests in the company."
Stabilized rice bran
Rice bran - the outer layer of the brown rice kernel after the husk has been removed - was until recently regarded as a waste by-product of commercial rice-milling and used as low-grade animal feed.
By arresting the enzymatic reaction that causes raw rice bran to deteriorate after milling, however, NutraCea has been able to stabilize it and produce a range of ingredients for the human nutrition market.
The firm, which has recently been working with ingredients giant DSM on extracting high-quality protein from rice bran , also sees potential for defatted rice bran as a means of cutting fat in coatings and batters by reducing oil uptake during frying.