Planet Organic Is Bankrupt

The creditors take over. How will they manage the business and the stores? Stay tuned!

End of the Road For Planet Organic

EDMONTON — An Ontario court has approved the acquisition of Planet Organic Health Corp.'s assets by its principal creditor, the Edmonton-based natural and organic-products retailer said Tuesday.

While Planet Organic stores will continue to operate, the publicly traded company that was launched in 2001 to expand the chain is left with no assets and ceased trading on Tuesday.

"It is sad for the shareholders -- and I am one of the shareholders -- that there is no value left in the public company," Darren Krissie, executive vice-president for Planet Organic, said in an interview.

But he said the acquisition by Toronto-based Catalyst Capital Group Inc. of its assets, including the name Planet Organic, is good news for customers, employees and suppliers.

"We have a strong financial backer that wants to grow the business," he said.

All but one of the stores in Canada and the U.S. will continue to operate, he said.

Planet Organic received bankruptcy protection under the Companies' Creditors Arrangement Act in April, when more than $31.1 million in debt was called in by Catalyst Capital. The private-equity firm, which invests in distressed companies, had bought the debt from Ares Capital Corp.

The chain got its start in 1993 when Diane Shaskin and her husband, Mark Craft, opened a single health-food store on Whyte Avenue.

Planet Organic currently operates nine natural food supermarkets in Canada and 11 in the U.S.

At its peak in 2008 it also owned 50 Sangsters Health Centre stores, seven Healthy's Nutrition shops and manufactured natural supplements at its Trophic Canada division.

It expanded as demand for organic food grew and moved into the U.S. by acquiring the 11-store Mrs. Green's Natural Market Inc. chain in 2007. But the company ran into financial difficulties during the recession as it expanded in Toronto.

In its recent third-quarter statement, Planet reported a $16.7-million loss after writedowns and revenues of $28.3 million

Partnership Capital Growth acted as Planet's financial adviser for the sale of assets to Catalyst and will be paid a transaction fee of $1.1 million. Brent Knudsen, a principal with Partnership Capital, has resigned from the Planet board along with director Ian Newton.

Krissie will continue as the sole director but is expected to resign soon, Planet said in a news release.

View Original Article Here