Cocopah Nurseries of Arizona, Inc., which grows palm and citrus trees, has filed for bankruptcy, Bloomberg reports.
The company reportedly took a hit when the demand for landscaping on construction projects dried up. Now, the company hopes to use bankruptcy protection to stay afloat while reorganizing its business.
According to Bloomberg, the palm grower originally attempted to restructure outside of court. Apparently, that restructuring failed because the company is now turning to the courts to help reorganize its failing business.
This month, the company filed for bankruptcy in the U.S. Bankruptcy Court for the District of Arizona. According to its filing, Cocopah and its affiliates “remain caught between, and impacted by the prepetition lenders’ inter-creditor disputes to some degree.”
The company has reportedly fallen behind on its loan payments. Cocopah owes $70 million to RaboBank NA and $65 million to Wells Fargo NA, according to Bloomberg.
Filing for a chapter 11 bankruptcy will allow Cocopah Nurseries to shed much of its debt burden while working toward becoming profitable again. According to court documents, Cocopah plans to continue operations while working through its bankruptcy plan. The company currently has around 250,000 palm trees growing in Arizona and California.
The debtor company in a Chapter 11 proceeding must file a plan of reorganization that outlines how the company intends to discharge or partially repay its debts. That can involve closing branches of the debtor’s business, selling off certain assets, or renegotiating leases and contracts.
Hopefully, with the help of a bankruptcy trustee, Cocopah Nurseries of Arizona will be able to pull of the reorganization it previously failed to complete.
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