New owner takes over Nurserymen's Exchange

Employees of Nurserymen's Exchange met the top brass at their new parent company, Monterey Peninsula Horticulture Inc., on Monday, the first business day under new ownership after emerging from Chapter 11 bankruptcy.

Charles Kosmont, CEO of the Salinas-based company, took the opportunity to announce the creation of a new think tank-like nonprofit called the Institute for Floriculture Innovation. The institute will initially be housed at Nurserymen's Exchange but will feature a rotating group of directors from different worlds, including floriculture, food and fashion, to figure out how to revive the faltering floriculture industry.

"We're mostly interested in attracting the biggest thought leaders in the industry to help us make consumer demand for plants in America equal to that which we see in Europe," Kosmont in an interview Monday afternoon.

Kosmont's company swooped in to buy Nurserymen's Exchange this spring after the Half Moon Bay-based indoor plant wholesaler succumbed to its mounting debts. A San Francisco bankruptcy judge approved the $4 million sale July 20, and the money went to the prime creditor, Wells Fargo.

A new company called Tally One Inc. will sell off the assets that remain under bankruptcy protection. In particular, the company hopes to sell a 28-acre parcel next to Highway 1 that is zoned for development and use the money to pay off a long list of remaining creditors. Tally One owes Wells Fargo another $11 million and its creditors $9.4 million, according to bankruptcy papers.

Monterey Peninsula Horticulture has taken out several lines of credit to finance the working capital needs of Nurserymen's Exchange, according to Kosmont.

Perhaps the best news for the 141 Nurserymen's Exchange employees on Monday is they will all keep their jobs. "It's the best of all possible outcomes we could have imagined, considering the situation," said Justin Dautoff, newly appointed president and former chief operating officer of Nurserymen's Exchange.

When combined with Monterey Peninsula Horticulture and its 120 employees, the new group claims to be the third-largest greenhouse grower in the industry in terms of square footage of production.

Nurserymen's Exchange mostly produces campanula, sun stars, specialty trees and roses. Rocket Farms, a subsidiary of Monterey Peninsula Horticulture, sells orchids, calla lilies and edible plants and flowers.

Nurserymen's Exchange had $67.2 million in revenues in 2010, according to bankruptcy filings. The company laid off nearly half its employees in July 2010, some of whom had been with the company for 20 years. The workers contacted the United Farm Workers of America, which organized a campaign to picket the company.

The laid-off workers, along with some current employees, subsequently held a vote on union representation. Many of the ballots are still sealed pending the results of a dispute over the vote's validity. The California Agricultural Labor Relations Board will hold a case hearing in September.

Buying flowers and potted plants just isn't part of Americans' everyday lifestyle the way it is in Europe. The market demand for indoor blooms collapsed in the recession, and the industry has been slow to react, Kosmont said. Many industry heavyweights like Nurserymen's have gone under since 2008 or are fighting to survive. Kosmont and Dautoff hope to change that soon.

"Every month, I've seen a new name get in trouble," Kosmont said.