Plant Grower blaims heavy rains
US: Zelenka Farms files for bankruptcy
Lawyers who put Zelenka Farms into chapter 11 protection on Friday told a judge they are looking for buyers to take over the Irving, Texas-based company's six farms, which employ 1,519 people located in Tennessee, Oregon and other states.
During a court hearing on Monday, Zelenka Farms bankruptcy lawyer Holland O'Neil said the company's financial troubles began in 2014 but worsened dramatically after an unexpectedly rainy April and May, leaving it without enough money to pay down part of a loan before a June 3 deadline.
"Those are the prime selling times for the company, and that severely impacted the sales and revenue," Ms. O'Neil told U.S. Bankruptcy Judge Harlin Hale.
Zelenka Farms and several affiliated companies face roughly $187.7 million in debt, according to documents filed in U.S. Bankruptcy Court in Dallas.
Zelenka Farms officials are negotiating with several potential buyers who could purchase the company's operations by an Aug. 8 deadline, Ms. O'Neil said. In court papers, the company proposed to hold a July 25 auction if several offers trickle in.
Judge Hale said Zelenka Farms officials could begin spending part of a $35 million bankruptcy loan. Company officials have also proposed to continue making payments to some vendors including chemical suppliers, shipping firms and plant breeders who enable Zelenka Farms to grow plants using their patented and trademarked DNA.
Without the loan, Zelenka Farms and its affiliates "would not be able to fund their operations, would run out of cash and would be forced to shut down their operations," Chief Executive Eric W. Ek said in court papers.
Founded in 1993 under the name Berry Family of Nurseries, the company grows plants on a total of 3,577 acres of land on farms in Oregon, Tennessee, Oklahoma, Michigan and North Carolina.
Source: Dow Jones Newswires
