Plant wholesaler Nurserymen’s Exchange has filed for Chapter 11 bankruptcy protection.  The petition will be heard in the Northern District of California Bankruptcy Court.  Nurserymen’s Exchange is also announcing the sale of 28 acres of land as part of its efforts to restructure the finances of the company.

The reason for the bankruptcy is lowered consumer spending due to the recession, which has affected people’s disposable incomes.  The company believes that the sale of the 28 acres of land will result in revenues of $8 million which will be used to pay down debt.  The company has been in the process of making changes to its management, and last year fired more than 100 of its 300 workers.

Chapter 11 bankruptcy is designed to help a business reorganize its debt, allowing the business to continue operations.

Continued operations however, may be subject to review by a court-appointed trustee.  It is the role of the trustee to make the business more efficient, and see that the creditors are paid.   The business will be required to furnish a profit and loss statement and other financial documentation every month.

Los Angeles business bankruptcy lawyers often recommend Chapter 11 bankruptcy filing in cases where a company has significant goodwill, which the company could lose by going out of business.  Also, the court will give a business time of several months to begin paying its creditors.  That automatically means improved cash flow into the business.

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