Cocopah Nurseries of Arizona, Inc., which grows palm trees and citrus in the desert, filed for bankruptcy, blaming a slowdown in demand for landscaping from builders.
The Indio, California-based company said it was forced into bankruptcy after an out-of-court restructuring failed.
Cocopah and its bankrupt affiliates “remain caught between, and impacted by the prepetition lenders’ intercreditor disputes to some degree,” Duane Young, company vice president, said in court papers filed yesterday in Yuma, Arizona.
The filing comes after new-home sales have begun to grow. Sales increased 7.6 percent in May to their highest level since the spring of 2010, mostly on gains in the South and Northeast, the U.S. Commerce Department reported June 25.
The company owes RaboBank NA $70 million and Wells Fargo NA (WFC:US) $65 million, according to court papers.
Cocopah plans to use the bankruptcy to keep operating while it tries to reorganize, according to court papers.
Andy Frokjer, a spokesman for RaboBank, didn’t immediately return a phone call seeking comment on the bankruptcy. Elise Wilkinson, a spokeswoman for Wells Fargo, didn’t immediately return an e-mail seeking comment.
Cocopah has about 250,000 palm trees growing on 14,000 acres in Arizona and 9,000 acres in California.
The case is In re Cocopah Nurseries of Arizona Inc., 12-15292, U.S. Bankruptcy Court, District of Arizona (Yuma).
-- With assistance from Bill Rochelle in New York. Editors: Peter Blumberg, Charles Carter
To contact the reporter on this story: Steven Church in Wilmington, Delaware, at email@example.com.
To contact the editor responsible for this story: John Pickering at firstname.lastname@example.org