Thursday, February 9, 2012

California Company, DriWater Inc., Files Chapter 7 Bankruptcy

DriWater Inc., a 22-year-old Santa Rosa, California, company that made slow-release gel packs for watering plants, has filed for Chapter 7 bankruptcy, listing $213,000 in assets and close to $7.5 million in debt.
The company had financial backing from a number of local investors, including the family of the late Charles Schulz, creator of “Peanuts”. The family owns the patent on DriWater’s biodegradable gel formula, and Jean Schulz, the cartoonist’s widow, holds a $1.5 million unsecured claim against the business, according to DriWater’s bankruptcy filing.
Driwater’s bankruptcy attorney averred that unsecured creditors will not be able to get any cash from the liquidation, since there are no assets remaining. Secured creditors may be entitled to some payment following the sale of the company’s equipment and inventory.
Driwater’s president, Joseph Paternoster, announced that the failure of his company was due, in great part, to the slowing of the real estate market. He added that when the company started in 1990, they were a pioneer in green technology, “growing trees and saving water”.
According to a story on www.pressdemocrat.com by Steve Hart, the water-filled packs were constructed of a patented, natural gel that slowly broke down when exposed to soil. The biodegradable containers gradually released water for up to three months. Small packs were sold to home gardeners who used them to keep their houseplants watered while they were away on vacation, while larger containers were used by landscapers to irrigate new plantings in places where automatic sprinklers were not available, such as new developments and highway median strips.
DriWater’s customers included garden shops, hardware stores, landscaping businesses, irrigation supply companies, as well as government agencies and nonprofit environmental restoration groups. However, according to bankruptcy documents, annual sales never surpassed $2 million, dropping to less than $1 million for the past three years.
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