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Color Spot Nurseries Emerges from Chapter 11

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August 21, 2018 – Color Spot Nurseries, Inc. (“Color Spot”), a leading grower and distributor of quality live plants in the western and southwestern United States, announced its emergence from Chapter 11 effective August 17, 2018. Color Spot will be wholly owned by Wells Fargo Bank (“the Buyer”), which used debt owed to it by Color Spot to credit bid for a majority of Color Spot assets in a Section 363 auction. On August 15, 2018, Color Spot notified the Court hearing its Chapter 11 case, that it, and each of its affiliated debtors (together “the Debtors”), had executed both a revised asset purchase agreement (“the APA”) and a plan support agreement with the Buyer pursuant to which Wells Fargo committed to supporting the Debtors’ plan of reorganization and to purchase a majority of Color Spot’s assets.

Under the terms of the APA, the Buyer has paid a combined purchase price of up to $82 million, comprised of (i) cash converted from Color Spots’ accounts receivable in the aggregate amount equal to $9 million, (ii) cash in an amount not to exceed $22,000,000 sufficient to satisfy the Debtors’ obligations to Capital Farm Credit (“CFC”) and (iii) a credit bid in the amount of $52,000,000.” Privately-held Color Spot filed for Chapter 11 on May 29, 2018, listing $117.5 of bank debt including then balances of $83.4 million owed the Buyer and of $20.5 million owed to CFC.

The Company cited a series of operational setbacks as leading to its decision to seek Chapter 11 protection, including California’s six-year drought, adverse weather events in Texas in 2015 and 2017 and an acknowledged deterioration in customer service levels. As at its petition date, Color Spot disclosed estimated liabilities of between $100 million and $500 million, with the majority of its top 30 unsecured creditors listed as trade creditors, with claims ranging from $120,000 to $2.5 million. In a press release announcing its emergence from Chapter 11, Color Spot also announced that Scott Zoch had been named as its new chief executive officer. Mr. Zoch joined Color Spot in 2001 and has held key positions at the company in sales, marketing, account management, purchasing and logistics. He most recently served as its vice president of sales & marketing.

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The post Color Spot Nurseries Emerges from Chapter 11 appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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