Hines Nurseries files Chapter 11 bankruptcy amid decline in revenues

By Caroline Salls

Pittsburgh, Oct. 13 - Hines Nurseries LLC filed for Chapter 11 bankruptcy on Tuesday in the U.S. Bankruptcy Court for the District of Delaware.

According to a company news release, Hines Nurseries has been exploring restructuring options in recent months, including efforts to extend a line of credit to continue its operations.

The company said it has worked diligently to resolve its liquidity and financing issues that were brought on by greater-than-expected declines in revenue stemming primarily from weaker consumer demand for nursery products and significant increases in production and distribution costs within the industry.

Hines said its board of directors decided to file for bankruptcy "to protect the interests of all of its stakeholders."

In conjunction with the bankruptcy filing, the company has secured a commitment for $5 million in interim debtor-in-possession financing, and it expects to have up to $20 million available on a final basis, subject to execution of definitive documentation and court approval.

Black Diamond Commercial Finance, LLC is the DIP loan agent.

Interest will be 12%.

The DIP facility will mature on the earliest of 180 days from closing, upon a sale of substantially all of the company's assets, upon confirmation of a plan of reorganization and upon conversion of the bankruptcy case.

Since the company believes that Chapter 11 protection and the financing it secured should enable it to continue operations, the company is seeking court approval for a variety of first-day motions.

These include requests to make wage and salary payments and provide other benefits to current employees.

According to court documents, Hines has $100 million to $500 million in assets and $50 million to $100 million in debt. At the end of the second quarter, the company posted $179.3 million in total assets and $86.7 million in total debt.

The company did not list any unsecured creditors with claims of $1 million or more.

BD CHG Holdings LLC owns more than 10% of the consolidated company's equity.

The company is represented by Pachulski Stang Ziehl & Jones LLP.

Hines Nurseries is an Irvine, Calif., commercial nursery operation. The case was filed under the name Consolidated Horticulture Group LLC. The Chapter 11 case number is 10-13308.

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