Hines Sale Moves Forward

Hines Sale Moves Forward

Black Diamond Capital Management LLC will be purchasing Hines Horticulture, bringing one of the nation’s largest growing operations out of Chapter 11 bankruptcy protection. The asset purchase agreement was approved by the U.S. Bankruptcy Court for the District of Delaware this week.

Based in Irvine, Calif., Hines has seven facilities spanning 4,000 acres of outdoor and greenhouse production in Arizona, California, Texas and Oregon. Hines filed for Chapter 11 bankruptcy protection in August and Black Diamond was secured early on to be the lead bidder during the bankruptcy sale process. No other bidders came forward with a better offer. The sale price has not been revealed yet.

Based in Lake Forest, Ill., Black Diamond is a privately held alternative asset management firm that manages about $5.4 billion in assets across hedge funds, control distressed/private equity funds and collateralized loan obligation vehicles. According to Stuart Erickson, managing director of Miller Buckfire & Co., which is representing Black Diamond in this case, “Black Diamond has a proven track record of acquiring substantial operating assets out of Chapter 11.” The newly formed entity purchasing Hines is owned by affiliates of Black Diamond.

Hines also filed an amended plan for its emergence from Chapter 11 bankruptcy protection, which will be voted on by its creditors by Jan. 21. A confirmation hearing is scheduled for Jan. 28.

Hines owes more than $192.6 million to unsecured creditors with nonpriority claims. Ahead of them to collect money are secured creditors, like banks, and all tax-collecting government agencies where Hines operates.

The top 12 claims from unsecured creditors who are also industry suppliers include:
–SunGro Horticulture–$550,557 (Hines used to own SunGro)
–Syngenta Seeds–$516,888
–Ball Seed–$445,807
–Conard-Pyle Co.–$208,026
–McGregor Plant Sales–$205,007
–Simplot Partners–$176,118
–ForemostCo Inc.–$167,865
–Western Farm Service–$158,352
–Wilbur-Ellis Co.–$146,263
–Abbott-IPCO–$145,280
–Magnolia Gardens Nursery–$140,800
–BWI Companies–$107,185

Together, the claims from these dozen companies represent nearly $3 million of the $192.6 million, so the debt is distributed widely to hundreds of companies.

Interestingly enough, royalty agreements are a priority in bankruptcy cases. Court records show Conard-Pyle should be receiving more than $220,000 in royalty payments. Others listed include more than $10,000 for Weidners Gardens, more than $13,000 for Spring Meadow Nursery and $18,000 for Flowerwood Nursery.

Leave a Reply

10 comments on “Hines Sale Moves Forward

  1. I found the comment about royalties being a priority of interest. Recently, one of our licensed growers filed for bankruptcy. Despite being listed as a creditor we were not even able to find out how much royalties we were due, let alone any payment.

  2. Received notice of sale with last date to submit bids one day after last day to submit bids. Looks like they didn’t want any other bids other than Black Diamond’s. Looks like a “FIXED” deal.

  3. Does this mean that my soil costs will rise since Sungro is unlikely to recover much of what they are owed? Same with Ball and Syngenta. These companies sold out to Hines and HUNG EVERYONE ELSE OUT OUT TO DRY !!!!

  4. Lots of these same supplier/creditors are selling Hines again. Wouldn’t you like to have hundreds of thousands of dollars just set aside and have same creditors selling you? Hines is many a grower’s direct competition.

  5. The games go on. We better hope that the
    back room moves, will not tear down the
    Green Biz. This is the same type of dealing going on with bank bail outs and
    maybe Car companies getting bailed out?

  6. I found the comment about royalties being a priority of interest. Recently, one of our licensed growers filed for bankruptcy. Despite being listed as a creditor we were not even able to find out how much royalties we were due, let alone any payment.

  7. Received notice of sale with last date to submit bids one day after last day to submit bids. Looks like they didn’t want any other bids other than Black Diamond’s. Looks like a “FIXED” deal.

  8. Does this mean that my soil costs will rise since Sungro is unlikely to recover much of what they are owed? Same with Ball and Syngenta. These companies sold out to Hines and HUNG EVERYONE ELSE OUT OUT TO DRY !!!!

  9. Lots of these same supplier/creditors are selling Hines again. Wouldn’t you like to have hundreds of thousands of dollars just set aside and have same creditors selling you? Hines is many a grower’s direct competition.

  10. The games go on. We better hope that the
    back room moves, will not tear down the
    Green Biz. This is the same type of dealing going on with bank bail outs and
    maybe Car companies getting bailed out?

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