- change ups
Zelenka Will Pursue Bankruptcy
The Chapter 11 bankruptcy filing could come as early as today and would provide the Grand Haven-based Zelenka, one of the world’s largest wholesale growers of nursery and ornamental plants and among Ottawa County’s largest employers, an opportunity to arrange for the sale of the company to an interested buyer, although liquidation could still occur, Zelenka Board Chairman Tom Ablum said.
“It’s now up to the court to decide if that’s the way it’s going to go or if they’re going to unemploy everybody and sell the land,” Ablum said today. “Since the banks seem to be incapable of making decisions and to be on the same page, we’ll let a court and judge decide how and what’s going to happen.”
The Grand Haven-based Zelenka Nursery, owned by Chicago-based Franklin Street Equity Partners, ceased operations Sept. 3 when the company’s senior lending group, consisting of four banks, “declared they are no longer interested in funding Zelenka Nursery,” company President Richard Brolick said.
The banks — Fifth Third, Bank One, Comerica and Standard Federal — removed all cash from Zelenka’s accounts and demanded that the company turn over all assets in three states for liquidation, he said this week. A spokesman for Fifth Third Bank in Grand Rapids said he could not comment on the situation.
The banks’ decision left more than 1,000 Zelenka employees, the majority of them in Ottawa County, out of work.
Zelenka Nursery grows more than 10 million nursery and ornamental plants annually that are sold in some 5,000 retail and landscape stores in 42 states. Plants are grown on about 5,000 acres of fields in West Michigan, about half of which are leased, with far smaller operations in Tennessee and North Carolina.
Zelenka ran into trouble two years ago following the Sept. 11 terror attacks. The subsequent bankruptcies of Kmart and Frank’s Nursery, as well as the closure of regional nursery departments at Target stores, worsened the situation.
But Zelenka, with annual revenues of $60 million, has since restructured and overcome the financial problems, was “extremely profitable” and has a current debt level of $18 million that’s half of what it was a year ago, Ablum said.
“We stubbed our toe two years ago, just like everybody else,” Ablum said. “But we corrected everything that was a problem two years ago.
“We don’t agree with the banks’ position. We don’t understand their position.”