Meal kit delivery company Terra’s Kitchen files for Chapter 7 bankruptcy

The Canton-based company stopped day-to-day operations in August.

A Terra's Kitchen meal kit. (Courtesy photo)

Baltimore meal kit delivery company Terra’s Kitchen filed for Chapter 7 bankruptcy this week, court documents state. The Sept. 24 filing comes after the company stopped daily operations on Aug. 12.

Founded in 2015 by former Medifast CEO Michael McDevitt, the Canton-based company offered subscriptions to meal kits that came with full ingredients for prep in a refrigerated container that could be reused. According to the filing, the company’s sales declined over the last two years, and it had accumulated $18.7 million in claims from debtors against $15,000 in assets.

As opposed to a reorganization, Chapter 7 bankruptcy typically involves a court-overseen liquidation of assets.

The Baltimore Sun reported obtaining a letter from Chief Financial Officer Brendan Connors that said the company was ceasing operations after struggling to raise capital in the competitive meal kit space’s “current environment.” The meal kit delivery space has big players such as Blue Apron, HelloFresh and SunBasket, offering an option for folks who want to save time but still be able to cook at home.

In August, the company posted on its website that it would be taking a break from day-to-day delivery as it moved toward becoming “a full-service health and wellness company.” This would include a relaunched meal kit and “DNA-based diets,” the website states. But that hasn’t materialized.

The bankruptcy filing shows a reversal for a company that was growing and looking to hire in 2017.  Terra’s Kitchen looked to stand out with a focus on health, variety and a delivery process with less waste, McDevitt said in 2017. Last year, the company also enlisted a top endorser: then-former Ravens QB Joe Flacco.

That year, it had revenue of $14.9 million, the filing states, but that number fell to $6.4 million the following year and $1.5 million this year, the filing states.

This filing indicates the company also had other court business over the last year, including settling a class-action lawsuit in California regarding subscription disclosures and an order to pay more than $100,000 to Jellyfish, the digital marketing firm that has a U.S. base in Baltimore.

Top outside investors in the company include New York-based Tuhaye Venture Partners and Hunt Valley-based Sinclair Broadcasting, according to the filing.


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