TreeSap Farms: Everde Growers' $131M Chapter 11 Buyout

TreeSap Farms, LLC, doing business as Everde Growers and ranking ninth on Greenhouse Grower's 2024 Top 100 Growers list, filed for Chapter 11 bankruptcy on February 24, 2025, in the U.S. Bankruptcy Court for the Southern District of Texas. The Houston-based horticultural producer blamed Southern California drought conditions followed by wet weather—combined with failed refinancing efforts and interest costs that more than doubled—for its approximately $207 million in funded debt obligations.

Operating 15 farms across California, Texas, Florida, and Oregon spanning over 6,700 acres, TreeSap produced more than 33 million plants annually across 5,000+ varieties and employed approximately 1,444 workers at filing. The case moved from filing to sale closing in 88 days: CEO Jonathan Saperstein maintained control through a $131.7 million sale to TYFCO, LLC—an entity controlled by existing ownership—that closed on May 23, 2025. The court confirmed the liquidation plan on July 8, 2025, with an effective date of August 1, 2025.

Company Background and Expansion

TreeTown USA launched in 2001 with a single farm in Glen Flora, Texas, approximately 70 miles southwest of Houston. The company grew through the 2000s as a regional supplier of ornamental shrubs and shade trees to retail and wholesale customers across Texas and surrounding states. Jonathan Saperstein, who joined the company after graduating from the University of Texas at Austin, led a management buyout in January 2015—a transaction awarded "Agricultural Acquisition of the Year" by M&A Advisor. The acquisition established Saperstein as controlling owner and CEO, positions he maintained through the bankruptcy restructuring.

Under Saperstein's leadership, the company executed a series of strategic acquisitions to establish a national footprint:

The company rebranded from TreeTown USA to Everde Growers in 2020. Saperstein received industry recognition including Forbes 30 Under 30 (Manufacturing & Industry, 2017) and EY Entrepreneur of the Year Gulf Coast Region (2018).

By the petition date, Everde operated a production network with:

TreeSap operated farms across three regional divisions:

Everde maintained a balanced 50/50 revenue split between retail and wholesale channels. Major retail customers included national home improvement chains. Wholesale customers included landscape contractors and re-wholesalers.

Financial Performance

The company's financial performance declined between fiscal years 2023 and 2024:

EBITDA declined 50% year over year. From 2022 to 2024, TreeSap's debt load increased by $22.5 million, and interest expense more than doubled. The cumulative interest cost impact totaled $25.3 million during this period.

Management implemented cost reductions, cutting annual expenses by $30.1 million from 2021 to 2024, including approximately 240 positions eliminated. Nursery growing cycles can span 18 months to 5+ years from propagation to saleable size.

Southern California operations were affected by weather-related challenges. Multi-year drought conditions in 2022 were followed by wet weather in 2023 and 2024. According to court filings, these losses "more than negated the Debtors' profitable operations in all other regions." The California operations were acquired through Village Nurseries (2017) and Hines Growers (2018). Southern California operations had shown "dramatic financial improvement" by the time of filing, with projections "highly favorable" for the upcoming growing season.

Employee and Operational Continuity

The 88-day sale timeline required workforce management. TreeSap employed approximately 1,444 workers—1,280 hourly employees and 164 salaried staff—at filing. Many hourly workers were agricultural laborers with nursery skills including plant propagation, irrigation management, pest control, and harvest operations. The DIP financing structure prioritized employee retention, authorizing immediate payment of prepetition wages, benefits, and expense reimbursements. Court filings emphasized that workforce continuity was essential to maintaining going-concern value, particularly as the case proceeded through peak selling season from March through May.

The buyer committed to retain all employees through the transaction. TYFCO assumed not only ongoing payroll obligations but also accrued vacation and benefit liabilities. The February 24 filing date coincided with pre-season preparation activities—nursery operations require intensive labor from February through May for planting, transplanting, pruning, fertilization, and pest management. The DIP facility authorized a $14 million immediate draw.

Pre-Petition Capital Structure

As of the petition date, TreeSap's funded debt obligations totaled approximately $207 million:

Capital Farm Credit, ACA held approximately $188.2 million in secured claims, representing the majority of TreeSap's debt structure. The Operating Note matured on February 1, 2025, just weeks before filing. Trade debt totaled approximately $24 million as of the petition date.

Refinancing Efforts and Path to Chapter 11

In July 2024, TreeSap engaged Armory Securities to pursue refinancing alternatives. The company explored multiple strategies including sale-leaseback concepts for owned real estate, subordinated debt financing, equipment financing structures, and outright sale of all or part of the business. Multiple third-party proposals emerged during the refinancing process. However, each required extended maturity dates from Capital Farm Credit—extensions the lenders did not provide.

Even in the final days before filing, the company received out-of-court proposals that management viewed as "quite favorable" to lender recovery prospects. According to court filings, these alternatives were not fully explored because Capital Farm Credit declined to provide additional time. By late 2024, Capital Farm Credit directed discussions toward DIP financing with sale milestones. On January 28, 2025, the lenders agreed to provide $3.2 million in emergency funding, contingent on a February 3 filing deadline. After brief extensions to evaluate final alternatives, TreeSap filed on February 24, 2025.

Chapter 11 Sale Process

TreeSap secured a $51 million debtor-in-possession facility from Capital Farm Credit:

The court granted interim approval on February 25, 2025, with final approval following on March 27, 2025.

DIP Financing Oversight and Milestones.

The DIP facility imposed milestones:

Cash disbursements were permitted to vary unfavorably by no more than 10% on an aggregate basis (excluding professional fees and DIP interest), with weekly variance reports required. A professional fee carve-out ensured payment of court fees and U.S. Trustee fees (capped at $75,000). The Debtors waived rights under Section 506(c) (surcharge of collateral) and Section 552(b) (equities of the case exception).

The Committee negotiated an extension of the challenge period for Prepetition Lenders' liens to June 10, 2025, while conducting lien analysis. Committee counsel prepared a draft complaint for potential challenges.

TYFCO, LLC was designated as the stalking horse bidder on April 9, 2025, with an asset purchase agreement valued at approximately $80 million. Armory Securities conducted a marketing process, contacting strategic and financial buyers with potential interest in horticultural production assets. However, no qualified competing bids emerged by the bid deadline. On April 25, 2025, the auction was cancelled, and TYFCO was declared the successful bidder.

Contested Matters and Contract Objections.

Multiple parties filed objections during the sale process, primarily regarding cure amounts for assumed contracts and executory leases:

Star Roses and Plants and Spring Meadow Nursery both invoked Section 365(c), arguing that non-exclusive patent and trademark licenses cannot be assigned without licensor consent. These parties conditionally consented to assignment to TYFCO, LLC while opposing assignment to Alta Arbor Holdings, LLC (an alternative bidder designation).

The Committee negotiated an increase in the stalking horse expense reimbursement to $750,000 (limited to two bidders).

The TYFCO Transaction

The sale to TYFCO, LLC—an entity controlled by CEO Jonathan Saperstein and existing ownership—was a management buyout through bankruptcy:

TYFCO committed to assume not only post-petition obligations but also all pre-petition undisputed ordinary-course trade payables.

MidCap Financial provided exit financing on June 4, 2025:

Professional Retentions and Fees

Creditor Recoveries and HCR Moorpark Settlement

The liquidation plan produced the following recoveries by class:

Net cash proceeds available for distribution—after paying DIP claims and funding wind-down costs—totaled approximately $42 million against secured claims alone of $161 million.

The treatment of HCR Moorpark Investors, LLC—holder of approximately $12.6 million in subordinated debt—was resolved through a global settlement approved on July 8, 2025. Capital Farm Credit contributed $425,000: $325,000 paid directly to HCR and $100,000 added to the GUC Recovery Pool.

The Prepetition Lenders' deficiency claim—stipulated at not less than $119.7 million—was waived solely with respect to participation in the GUC Recovery Pool, so the pool funded recoveries exclusively to trade and other unsecured creditors. Mutual releases were exchanged among the Debtors, HCR, and Prepetition Lenders.

The Official Committee of Unsecured Creditors, appointed on March 12, 2025 and represented by McDermott Will & Emery LLP and Province, LLC, negotiated the doubling of the GUC Recovery Pool from $100,000 to $200,000. Total Committee professional fees were $2,358,490.63 (McDermott $1,481,828 plus $8,804 expenses; Province $876,662 plus $120 expenses).

Plan Administrator David Zdunkewicz continues reconciling claims. Through December 2025, the Plan Administrator has filed eight omnibus objections, disallowing over $17.8 million in claims deemed satisfied, duplicative, or assumed by the buyer. A motion to close subsidiary cases (TSH Opco, TSV Opco, TSV Reco)—excluding TreeSap Florida, LLC—was filed August 8, 2025.

Industry Context

TreeSap's bankruptcy included industry perspectives on agricultural businesses facing consecutive years of adverse weather. Court filings state that Southern California weather conditions "more than negated the Debtors' profitable operations in all other regions."

The acquisition by existing ownership retained 1,444 employees and assumed approximately $24 million in trade payables. Exit financing totaled $110 million compared with approximately $207 million in prepetition funded debt.

TreeSap ranked ninth on Greenhouse Grower's 2024 Top 100 Growers list. The industry saw consolidation during the 2015-2022 period as private equity and strategic buyers pursued roll-up strategies. Under TYFCO ownership, Everde Growers continues operating with 14 farms totaling more than 6,700 production acres. The $110 million MidCap financing provided ongoing working capital. Exit financing totaled approximately $110 million versus approximately $207 million in prepetition funded debt.

Frequently Asked Questions

What caused TreeSap Farms to file for bankruptcy?

The company blamed Southern California drought followed by wet weather, combined with interest costs that more than doubled between 2022 and 2024. EBITDA declined 50% (from $23 million to $11.6 million), and the Operating Note matured on February 1, 2025.

Who bought TreeSap Farms out of bankruptcy?

TYFCO, LLC, an entity controlled by existing ownership including CEO Jonathan Saperstein, acquired substantially all assets for approximately $131.7 million in total consideration ($88 million cash plus assumed liabilities). All 1,444 employees were retained through the transaction.

What was the timeline from filing to emergence?

TreeSap filed on February 24, 2025, the sale to TYFCO closed on May 23, 2025 (88 days), the plan was confirmed on July 8, 2025, and the effective date was August 1, 2025—approximately five months total.

How much did secured lenders recover?

Capital Farm Credit recovered approximately 23.45% on secured claims of approximately $161 million. The deficiency claim was not less than $119.7 million, which the lenders agreed to waive with respect to the GUC Recovery Pool.

What happened to unsecured creditors?

General unsecured creditors received approximately 0.61% recovery ($200,000 GUC Recovery Pool on $16.4 million in claims). The buyer assumed approximately $24 million in pre-petition trade payables.

Why were trade payables assumed rather than discharged?

The buyer assumed pre-petition undisputed ordinary-course trade payables as part of the sale terms.

What exit financing supported the reorganized company?

MidCap Financial provided $110 million in exit financing: a $90 million asset-based revolver plus a $20 million real estate term loan. The facility refinanced the acquisition and provides ongoing working capital.

Is Jonathan Saperstein still running the company?

Yes. Saperstein, who led the 2015 management buyout and was recognized as Forbes 30 Under 30 (2017) and EY Entrepreneur of the Year Gulf Coast (2018), maintained control through the TYFCO acquisition. Existing management and ownership remained in place post-emergence.

How many farms does Everde operate now?

Everde operates 14 farms totaling more than 6,700 production acres across Texas, Florida, California, and Oregon. The company produces over 33 million plants annually across 5,000+ varieties.

What were total professional fees in the case?

Major professional fees exceeded $9.9 million, including Armory Securities ($3.66 million investment banking), Hunton Andrews Kurth ($2.88 million debtors' counsel), McDermott Will & Emery ($1.48 million UCC counsel), Province ($877K UCC financial advisor), and The Keystone Group ($875K CRO services).

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For more analysis of agricultural sector restructurings and Chapter 11 developments, visit the ElevenFlo bankruptcy blog.