According to the North County Times (Calif.), the only bid submitted to purchase Hines Nurseries in federal bankruptcy court over the last few weeks was from Black Diamond Capital Management, which already holds a substantial portion of Hines’ debt. Bank of America holds a substantial portion of Hines’ debt, as well.
The North County Times indicates it could not reach Black Diamond earlier this week for a comment on its approach to Hines. Trey Pitsenberger, however, wrote earlier this week about Black Diamond’s bid for Hines on his blog, The Blogging Nurseryman. Pitsenberger received a comment from a reader who expressed the following sentiment:
“My personal take is Black Diamond couldn’t be happier. From what I’ve heard, they sucked the place dry before the auction by laying off salesmen, not canning new material, etc. They made a killing off that and now they got the company back for pennies on the dollars. [Thirty-one million dollars] is not pennies but if I remember correctly at the time of filing there were about $130 million [in] assets and $50 million in liabilities. They essentially bought an $80 million company for $30 (million). My guess is they (will) continue selling off plants and sell the company off in pieces to continue maximizing profits. Which essentially means Hines is done. Again, I am just speculating, but does anyone think Black Diamond is in this for the long haul?
In the bankruptcy court filings, North County Times reports Bank of America objected to Black Diamond’s request for an additional $10 million in debtor-in-possession financing to continue operations until the deal can be closed April 14. The legal documents also show Black Diamond is seeking assurances from Home Depot and Walmart to continue buying plants from Hines.
Stay tuned to GreenhouseGrower.com for more information as the Hines Nurseries story develops. In the meantime, tell us what you think of Black Diamond’s strategy and the future of Hines in the comments section below.