- change ups
Auction Holds Zelenkas Fate
GRAND HAVEN — A federal bankruptcy judge could seal the fate of Zelenka Nursery Inc. next week, as the wholesale grower goes up for bid at an auction.
Zelenka’s chairman expects that the auction, scheduled for Oct. 21, will result in an offer from a buyer that would keep the nursery operating, as well as meet with the consensus approval of creditors and a bankruptcy trustee and ultimately the bankruptcy court.
The Grand Haven-based Zelenka Nursery, one of the world’s largest wholesale nurseries, has two solid offers for the company and may get more by the time the auction occurs, Chairman Tom Ablum said. One of the offers, from the suburban Chicago investment firm Hilco Equity for $19.8 million, would pay off secured creditors, leaving about $3 million in unsecured debt.
“We’re very hopeful that by the end of the month the company will be out of the predicament it’s in,” Ablum said last week after Zelenka, its creditors and a bankruptcy trustee agreed on procedures for the court-supervised auction.
Zelenka Nursery, one of the largest employers in Ottawa County and the owner of some 2,200 acres of land, saw its existence threatened last month when a consortium of creditors — consisting of Bank One, Comerica, Fifth Third and Standard Federal — began to push the company toward liquidation. Zelenka Nursery subsequently filed for Chapter 11 bankruptcy in Chicago.
The company has twice convinced a federal bankruptcy judge to order the creditors to release funds necessary to continue operating the business and seek a buyer. Zelenka’s creditors have since dropped the opposition to the company’s sale, enabling executives to pursue potential new owners, Ablum said.
Ablum, of the investment group Franklin Street Equity Partners of Chicago, and a partner bought the 58-year-old Zelenka Nursery three years ago. Their initial investment of $14 million, plus another $3.5 million put into the business, has been “completely wiped out,” he said. Their concern now is to see the company continue operating and preserving the jobs of several hundred permanent and seasonal workers, he said.
“We’re extremely sensitive to taking care of all of our employees and workers and a bid that does that is going to be the better bid,” he said.
The winning bid, once agreed upon by Zelenka management, creditors and the bankruptcy trustee, would need the approval of the judge handling the case.