🪴New Chapter 11 BK Filing - TreeSap Farms LLC (dba Verde Growers)🪴
Horticulture producers file for bankruptcy to pursue a sale of their assets.
On February 24, 2025, Houston-based TreeSap Farms LLC (d/b/a Everde Growers) and four affiliates (collectively, the “debtors”) filed chapter 11 bankruptcy cases in the Southern District of Texas (Judge Perez). The debtors are horticulture producers (read: shade trees, shrubs and ornamental plants) with a network of 15 farms (some owned, some leased) in four states (nine in CA, two in TX, three in FL and one in OR) and an annual production of over 33 million plants. They ship throughout the country, servicing both retail (e.g., home improvement stores) and wholesale customers (e.g., prominent regional landscape firms), and if you’ve ever bought a plant through either channel, there are pretty good odds the debtors grew it.
These guys have done decent business the past couple of years. In ‘23, they generated $23mm of EBITDA on $179.2mm of revenue. In ‘24, however, both figures decreased, and the debtors generated $11.6mm of EBITDA on $170.6mm of revenue. On the liability side, the debtors carry, in various forms, funded debt of approximately $207mm,* of which approximately $188.2mm is due and owing to senior prepetition secured lenders under a Capital Farm Credit, ACA (“Capital Farm”)-agented facility. A good slug of that debt – $155.2mm– matured on February 1, 2025. The debtors also owe ~$24mm in trade debt (exclusive of certain contingent liabilities).
So, without further ado, what befell these debtors such that they’re gracing Judge Perez’s docket? California. California befell the debtors.
Extreme weather conditions in Southern California in ‘22, ‘23 and ‘24 caused substantial losses and reduced sales in that region, the culmination of which more than offset profitable operations in the debtors’ other regions. As revenue and profit declined, the debtors also faced rising working capital and interest expense — all necessitating operational fixes including the reduction of headcount by the hundreds. Above all of that was the looming debt maturity for which the debtors retained investment bankers at Armory Securities LLC (“Armory”) in July ‘24 to seek a refi out of the Capital Farm prepetition lenders.
How’d that process go?
Per owner, CEO and first day declarant Jonathan Saperstein:**