Sunbelt Nursery Seeks Protection from Creditors
In default on a $5-million loan, money-losing Sunbelt Nursery Group Inc. said Thursday that it has filed a bankruptcy petition to protect itself from creditors while it tries to reorganize its debts.
The company, which has 60 retail outlets in California, Texas and Arizona, said it will continue to operate under Chapter 11 of the federal bankruptcy code while it reorganizes.
As part of its petition, Sunbelt also is seeking court permission to sell 15 retail garden-center stores in California for about $3.05 million.
“We’re looking to other alternatives, such as regrouping under a different structure,” said Craig Koehler, chief financial officer. “Those scenarios are under analysis now.”
Koehler declined to comment further.
In addition, the company, which moved last fall to Southern California from Fort Worth, Texas, said that directors Rod Burwell, John Tastad and Rudy Boschwitz resigned. The company named Chad Ruth, a consultant, to its board.
Sunbelt lost $5.6 million for the fiscal year that ended June 29, which was a major improvement over a $28.7-million loss the previous year. But its outside auditor, Price Waterhouse LLP, declined to continue as the company’s accountants.
In February, the company said it was trying to renegotiate the $5-million loan it received in November from Paragon Capital LLC in Boston.
The American Stock Exchange halted trading in Sunbelt shares on March 20 for the company’s failure to adhere to the exchange’s guidelines.