Chapter 11 allows the company to reorganize under federal bankruptcy laws. In the filing, IGP stated the company’s finances have been negatively affected by a number of issues unrelated to their own operations, including a bankruptcy filing by the owners of Jackson & Perkins.
That filing resulted in Jackson & Perkins failing to assure payment on a $1.7 million order for the 2010 season. IGP also cited three contingent liability issues totaling more than $27 million, as well as current market conditions.
“The company noted that it has worked diligently over an extended period of time to resolve the legacy contingent liability issues but that it has not been able to reach agreements with the parties,” according to a BusinessWire press release. “As a result, to protect the interest of its stakeholders–and to bring these issues to a conclusion in an orderly manner–the company decided to file for court-supervised protection under Chapter 11.”
IGP has secured $7.5 million in debtor-in-possession financing from a group led by Harris Bank. The company believes the financing will be adequate to meet the needs of Iseli Nursery and Weeks Wholesale Roses and to continue operations during the reorganization process.
Those at IGP emphasized they do not anticipate an interruption in services, and that customers will continue to have the same contacts at both Iseli and Weeks and can place orders for the spring 2011 season.