A 90-year-old giant of the nursery business is headed for a second round in bankruptcy court. Hines Nurseries LLC announced today that it has filed for Chapter 11 bankruptcy protection, according to Bloomberg News and a company press release. The press release blamed a weak market for the filing:
“The Company noted that it 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.”
Hines said it had $179.3 million in assets and $86.7 million in debts in the most recent quarter. The company has 4,000 acres in nursery production, including facilities in Oregon, Texas, Arizona and California. Hines said it has secured $5 million in “debtor in possession” financing so it can complete a reorganization. The company said it will continue to operate during the reorganization, and that its customers can order with confidence.
Today’s bankruptcy filing was not unexpected. Hines had notified regulators in Oregon and Texas last week that unless it could extend its line of credit, the company would be forced to declare bankruptcy and lay off workers in both states, according to reports in The Oregonian (Portland, Ore.) and elsewhere.
Earlier this year, the company announced that it would cease production activities at its headquarters in Irvine, Calif., resulting in the elimination of production jobs, but that it would continue to be headquartered there.
Hines Nurseries LLC is the successor to Hines Horticulture, which went through Chapter 11 bankruptcy in 2008. Company officials at the time said they were unable to pay off some $500 million in debt. The company emerged from the 2008 bankruptcy after several of its assets were purchased by Black Diamond Capital Management LLC, described in press reports as “a hedge fund and private equity firm based in Illinois.” Company officials said as recently as February that the new company had less debt and was better positioned to compete.
The company has gone through several ownership phases in its 90-year history. According to the Orange County Business Journal (Irvine, Calif.), the company was founded in 1920, purchased in 1976 by Weyerhaeuser Co., and later sold to a private equity firm. The company went public in 1998 with a stock offering that generated $56 million. Hines subsequently purchased several other nurseries around the country.