Hines Nurseries Files for Chapter 11
Hines Nurseries LLC and certain of its affiliates announced that the company has filed voluntary petitions in U.S. Bankruptcy Court for the District of Delaware for relief under Chapter 11 of the U.S. Bankruptcy Code.
According to a press release from the company, Hines Nurseries does not anticipate an interruption in services, and believes that its customers can continue to place their orders for the spring 2011 season.
The press release states that Hines “has worked diligently to resolve its liquidity and financing issues that were brought on by greater than expected declines in revenue. This decline in revenue stems primarily from weaker consumer demand for nursery products due to the overall sustained general weak economic conditions and significant increases in production and distribution costs within the industry.”
The company’s board of directors made the decision to file for court-supervised protection under Chapter 11 “to protect the interests of all of its stakeholders.”
According to several news reports, late last week Hines Nurseries, Irvine, Calif., was contemplating filing for Chapter 11 bankruptcy.
The company informed government officials in Oregon that it may have to lay off nearly 100 employees at its Forest Grove, Ore., facility if it could not extend its line of credit and obtain additional financing.
The company sent a Worker Adjustment and Retraining Notification (WARN) to state officials about the potential jobs elimination if the company could not secure new financing. The layoffs could take effect later this month or by the end of the year.
According to the WARN notice, the company could not inform its employees about the situation because it “would have hurt Hines’ chances of extending the line of credit and its ability to obtain other financing and business.”
Hines Horticulture filed for Chapter 11 bankruptcy back in August 2008. In December of that year, a federal bankruptcy judge awarded the assets of Hines Horticulture to asset management firm Black Diamond Capital Management, LLC.
In January 2009, the company successfully emerged from bankruptcy when Hines Nurseries LLC purchased certain assets of the former Hines entities. Earlier this year, the company announced the addition of a new management team.
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