| By Beverly Corbell
Tuesday, April 24, 2007
OURAY — The Biota water bottling plant in Ouray has been closed for several months, but by filing recently for Chapter 11 bankruptcy protection, owner David Zutler hopes to hold onto the plant and get it running again.
Zutler filed for bankruptcy protection on April 17 with the U.S. Bankruptcy Court for the District of Colorado, essentially forestalling a public auction of the company that was set for April 18 at the Ouray County Courthouse.
In 2004, Zutler’s company started bottling drinking water from Weehawken Spring, the city of Ouray’s main drinking water supply. The company also used biodegradable bottles made from corn instead of oil, which Zutler said are the first used in the bottled water industry.
Because of that, he said, Biota was the official bottled water at the 2007 Academy Awards.
Filing for bankruptcy will give Zutler a chance to start over, he said.
“Most people don’t understand what bankruptcy really means, but it gives us an opportunity to do a restart and get back in business,” he said.
In late March, Zutler hired Thomas Kim of Manchester Companies of Denver, which offers “investment banking, corporate renewal and management advisory services,” according to its Web site.
Kim will work with Biota’s creditors, which include about $8 million owed to UPS Capital and about $84,000 in property taxes owed to Ouray County, said County Treasurer Jean Casolari.
All the company’s creditors are invited to a May 23 meeting in Denver to be conducted by the U.S. Trustee’s Office, Kim said.
“It’s basically because they want to understand what the case is about and what the company’s plans are,” he said.
Biota may eventually file a Chapter 11 reorganization plan, Kim said, which will outline how the company plans to recover and involves “a lot of negotiations” with creditors.
Biota also owes the city of Ouray about $25,000, said City Manager Patrick Rondinelli, and the city’s waiting to see what happens in the bankruptcy process.
Rondinelli said he’s met with Kim, company representatives and potential buyers.
“In the end we just want it all to work out and the original intention of the business to work,” he said. “It’s a great concept, a clean industry and a local business that can employ local people year-round.”
Biota and the city had a dispute last fall when the company’s lab claimed it detected contaminants in the water and halted production. Rondinelli said extensive testing by two independent labs as well as the lab at the state Department of Public Health and Environment found no sign of contaminants.