A large Idaho dairy and cattle company and its creditors will enter into settlement talks after submitting competing reorganization plans in bankruptcy court.

Last year, Millenkamp Cattle filed for Chapter 11 bankruptcy protection to shield its assets from foreclosure, largely blaming a “squeeze” by lenders who’d allegedly deprived it of capital.

Rabo Agrifinance, one of Millenkamp’s creditors, later sought to have a trustee take over the company’s operations, claiming it’s being mismanaged by owner Bill Millenkamp and alleging he’s pursuing an infeasible bankruptcy reorganization plan.

While a bankruptcy judge denied that motion, Millenkamp Cattle’s creditors were allowed to file an alternative bankruptcy plan for repaying its debts and restructuring its business.

Under a recent plan proposed by Rabo, Bill Millenkamp and other family owners, or new investors, would pay $29 million to buy shares in the reorganized company as part of a “cash equity infusion” to strengthen its finances.

Millenkamp Cattle would also be required to sell off two Idaho properties totaling roughly 1,000 acres in Twin Falls and Jerome counties for approximately $20 million, which represents a “small percentage of their real estate,” according to Rabo’s plan.

The creditor argues these steps would make it unnecessary for Millenkamp to take on additional debt and would make it easier to refinance its existing loans on favorable terms.

As a “backup option,” Rabo is proposing that Millenkamp Cattle should be sold in its entirety as a “going concern,” or in the alternative, that its separate business units be sold off individually.

Millenkamp Cattle has several business divisions that collectively manage about 110,000 head of beef and dairy cattle, 20,000 acres of land and more than 500 employees, according to bankruptcy documents.

The company owes debts of about $90 million to Rabo, $180 million to Metlife and $21 million to Conterra, as well as $28 million to various parties whose loans aren’t secured with collateral.

Initially, Millenkamp submitted a bankruptcy plan in which the Cargill agribusiness company would provide a $120 million refinancing facility to repay other lenders but that proposal later fell through.

Another version of the plan required a refinancing facility as well, but Rabo complained that no lender had actually agreed to the deal and it may never materialize.

Under the latest bankruptcy plan proposed by Millenkamp, creditors would recover 100% of the money they’re owed, but some payments wouldn’t be made until after the company secures a “refinancing facility” in 2028.

Millenkamp’s latest plan would also require the sale of the two properties in Twin Falls and Jerome counties and sets terms for selling off other assets if the company can’t secure refinancing in 2028.

To avoid the “expense of litigating the issues at a full evidentiary hearing or trial,” Millenkamp and its creditors have agreed to settlement negotiations to resolve their disputes over plan confirmation.

Chief U.S. Bankruptcy Judge Noah Hillen has agreed to the request for the settlements talks, which have been scheduled for March 6-7 in Seattle, Wash.