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September 18, 2019Cart

Business

by Westchester County Business Journal
by WCBJ

Barchella Landscape, citing former family debts, files for Chapter 11 bankruptcy

Barchella Landscape & Masonry Corp. in Port Chester, whose owner said she was saddled with debts from former family businesses, has filed for Chapter 11 bankruptcy.

The Barchella family has been in the landscape business for decades, Wendy Barchella said in a court filing, but previous businesses “had failed and were forced to shutter.”

When she opened her company in 2011, she said, old creditors claimed that her company should be held responsible for the debts of the failed companies.

Bankruptcy protection would give Barchella Landscape “a breathing spell” from creditors, she said, and time to evaluate whether it can generate sufficient business and propose a reorganization plan.

The company estimated assets between $100,000 and $500,000 and liabilities between $1 million and $10 million in a Dec. 6 bankruptcy petition filed by attorney Erica R. Aisner of White Plains.

Its largest unsecured creditors are Customers Bank, New York, $2.8 million for a lawsuit claim that Barchella disputes; Sterling Bank, $899,500; Internal Revenue Service, $257,000; Prospero Nursery & Masonry, $125,000; and the state Department of Taxation and Finance, $108,677.

In Wendy Barchella’s account of what happened, her business got overwhelmed by litigation costs over claims that originated with previous family businesses, and it fell behind on taxes.

She settled lawsuits and negotiated an installment plan for taxes, and for a few years, she said, business was profitable. Then more lawsuits were filed, legal costs mounted and she fell behind on taxes again.

She tried to sell the company or bring in a new partner and capital, but the “threat of claims kept anyone from committing to move forward on any such transaction.”

The company cut its workforce, sold equipment and borrowed from family members “to help sustain operations.”

Still, it has struggled in recent months to pay off debts.

“And with the winter season fast approaching,” she said, “this difficulty is only expected to worsen.”

She projected income of $72,650 in the next 30 days, and expenses of $133,089.

Then, a few days ago, a creditor “restrained” the company’s bank account, making it nearly impossible to make payroll and pay basic operating expenses.

Barchella Landscape, she said, “was left with no choice but to file this Chapter 11 case.”