Sunbelt Nursery Group Inc., an operator of 60 retail nursery outlets in California, Texas and Arizona, said Friday that it has defaulted on a $5-million loan that it obtained just 2 1/2 months ago.
Sunbelt also said that Thomas Hoekstra quit as its chief financial officer after fewer than five months on the job. He was replaced by Craig Koehler, formerly chief financial officer of Thrifty Oil Co.
The company, which moved last fall to California from Fort Worth, also must find a new independent auditing firm. It said in a recent filing with the Securities and Exchange Commission that Price Waterhouse LLP declined to continue as the company’s accountants.
No reason was given, but both sides acknowledged that there were no disagreements over Sunbelt’s financial statements. The company lost $5.6 million for the fiscal year that ended June 29, a major improvement over a $28.7-million loss the previous year.
Sunbelt said its default on its loan from Paragon Capital LLC in Boston involves “financial and other reporting matters, and possible changes in the company’s financial condition” that require more borrowing.
The company said its executives are working with Paragon to resolve remaining issues and obtain waivers to the default. Paragon has continued to advance funds to Sunbelt during those efforts.
Timothy R. Duoos, Sunbelt’s chairman and 40% owner, was not available for comment.
The company released its news after the stock market closed. Sunbelt shares fell 6 cents to close at 81 cents a share on the American Stock Exchange.