Briefcase – October 2020

MILESTONES

Pilgrim’s Pride fires embattled former CEO Jayson Penn

GREELEY — Pilgrim’s Pride Corp. (Nasdaq: PPC) has fired former CEO Jayson Penn as he continues to prepare for trial in a federal price-fixing investigation.

In a U.S. Securities and Exchange Commission filing, the Greeley-based Pilgrim’s said it promoted Fabio Sandri to the full-time CEO position and named him president. He was formerly the company’s chief financial officer, but began serving as interim CEO in mid-June when Penn was given a leave of absence to focus on his defense.

Penn and three other chicken industry executives were indicted by a federal grand jury in June amid a broader U.S. Department of Justice investigation into alleged anti-competitive actions within the sector. Similar lawsuits have been made against Pilgrim’s and other major chicken packing companies in recent weeks, including by Post Holdings Inc.(NYSE: POST) and a chicken-farming operation in Texas that seeks class-action status.

Penn pleaded not guilty. His trial is set for Feb. 16 in Denver.

Serial entrepreneur, Techstars alum takes over Boulder accelerator’s leadership role

BOULDER — Andres Barreto, a veteran entrepreneur, venture capital investor and Techstars New York graduate, has been tapped to serve as the managing director of the Techstars Boulder startup accelerator program.

He takes over the leadership role for Natty Zola, who left his position this summer to focus on Matchstick Ventures, an early-stage investor in software companies that he co-runs with Minneapolis investor Ryan Broshar.

Barreto — co-founder of music streaming service Grooveshark, advertising network Onswipe and software programming education nonprofit group Coderise.org —  joins Techstars as the accelerator pivots to an all-virtual format for the foreseeable future.

MiRagen CEO resigns, company hires strategic review adviser

BOULDER — Bill Marshall, a cofounder and former CEO of MiRagen Therapeutics Inc. (Nasdaq: MGEN), has resigned from the Boulder biotech company as it made signals that it’s looking to merge or be acquired in the near future.

In a statement, Miragen said chief operating officer Lee Rauch would take over the company’s top spot. Marshall will remain as an adviser to the company but also relinquished his role as the board chairman along with the top executive spot. He has been with the company since its inception in 2006.

Miragen said it hired Ladenburg Thalmann & Co. for a review of “strategic alternatives,” a forerunner event that signals a company is interested in a merger, acquisition, taking on additional research work for another drug company or some other type of major business event.

Fort Collins Chamber head David May to retire at end of 2020

FORT COLLINS — Fort Collins Chamber president and CEO David May will retire at the end of the year after more than 17 years at the group’s helm.

The chamber has already begun searching for a replacement CEO, according to a statement from the organization.

“The 17½ years in Northern Colorado have been the highlight of my career,” May said. “The region is vibrant and livable. I’m proud of our business community for its support and leadership in helping make this an area we’re all proud to live in.”

May’s career began in the Independence, Missouri, Chamber of Commerce in 1980, where he began in communications before being named president. He later was president and CEO of the Sarasota, Florida, Chamber of Commerce in 1991, and then was hired as a vice president with the United States Chamber in Washington before joining the Fort Collins chamber in 2003.

Boulder Economic Council taps new executive director

BOULDER — Scott Sternberg, the former president of the American arm of Finnish sensor maker Vaisala Inc., was hired as the new head of the Boulder Economic Council.

In a statement, the Boulder Chamber said Sternberg will come on immediately to lead the group as it devises strategies for economic recovery as the COVID-19 pandemic continues.

The Boulder Economic Council is a subsidiary that manages the Boulder Chamber’s economic development efforts. Its last leader was Clif Harald, who left the position in March after nine years to focus on his private consulting business.

Viega names new CEO for Broomfield-based operation

BROOMFIELD — Viega LLC, which designs and manufactures high-tech plumbing equipment, has named a new president and CEO.

Markus Brettschneider, formerly group senior vice president and global head of marketing and sales for robotics company ABB, assumed the new role, replacing Dave Garlow, who resigned effective Sept. 1.

Viega is a subsidiary of Viega Holding GmbH & Co. and built its U.S. headquarters in Broomfield in 2017.

LAYOFFS

NetApp confirms layoffs, reorganization affecting Boulder’s SolidFire

SUNNYVALE, California and BOULDER — A companywide layoff at California-based cloud-management firm NetApp Inc. (Nasdaq: NTAP) will likely lead to job losses among its Boulder employees.

In a call with analysts, CEO George Kurian confirmed media reports of a 5% reduction in staff to refocus the company on more-profitable sections of the business.

He also confirmed layoffs and restructuring at SolidFire, a formerly Boulder-based producer of flash memory for cloud data centers. NetApp acquired the company in February 2016 for $780 million and maintained staff and an office in Boulder. SolidFire in 2015 leased 62,000 square feet in PearlWest at 11th and Pearl streets.

“We are narrowing our focus with the SolidFire … portfolio to the high margin parts of the market as we have signaled on prior calls,” he said on the analyst call.

The company declined to specify the number of layoffs or how many employees are at that office when reached by BizWest Monday but said none of the layoffs are motivated by “corporate-level cost cutting” or by the economic crisis caused by COVID-19.

It also has not filed a mass layoff notice with the Colorado Department of Labor and Employment as of publication time.

NetApp reported a profit of $872 million in the second quarter of the year, an increase of $56 million over the same time period in 2019.

BANKRUPTCIES

Lafayette’s Creekside Cancer files for bankruptcy protection

LAFAYETTE — Creekside Cancer Care LLC, a Lafayette oncology treatment center, filed for Chapter 11 bankruptcy protection.

The company’s office space at 120 Old Laramie Trail is being foreclosed, Boulder County Public Trustee documents show.

This isn’t the first time Creekside Cancer, which is led by CEO Matt O’Rourke, has sought Chapter 11 protection. The firm declared bankruptcy in late 2016, according to court documents.

A Boulder Daily Camera report from early 2017 attributed Creekside’s financial woes to “a legal battle with a supplier of medical equipment [that] left the company on the hook for millions of dollars in monthly payments.”

Creekside’s bankruptcy petition lists between one and 49 creditors, total assets of $500,001 to $1 million, and total liabilities of $1,000,001 to $10 million.

Creditors attempt to force Aleph Objects’ successor company into liquidation

LOVELAND — A group of debtholders is attempting to force the successor company to the now-defunct 3D printing company Aleph Objects Inc. into an involuntary liquidation.

Larimer Skyview Inc., the successor to the formerly Loveland-based Aleph, was issued an involuntary Chapter 7 bankruptcy petition in federal court by four companies claiming a total of $1.13 million in existing trade debt.

The largest of those debtors is CCX Corp., a Lafayette-based maker of cables and data-center equipment. It claims $461,260 in unpaid invoices.

In most cases, a company files a Chapter 7 petition to liquidate itself and distribute the proceeds to its debtors. However, debtors can ask a bankruptcy court to liquidate a company that won’t do so by itself if the company meets certain benchmarks and generally isn’t paying debts that are not part of an ongoing legal dispute.

Concurrently, Larimer Skyview is the subject of a federal lawsuit in Massachusetts from software developer Integrated Computer Solutions Inc., which is trying to collect a $389,981 payment from an earlier arbitration case.

Jason’s Deli Colorado franchiser files for Chapter 11 bankruptcy

CENTENNIAL — The holding company for Colorado’s six Jason’s Deli franchises, including locations in Fort Collins and Broomfield, has filed for Chapter 11 bankruptcy.

The holding company, which is registered as Centennial-based Bullshark Inc., reported $1.38 million in assets against $3.53 million in liabilities, according to filings made in the Bankruptcy Court of Colorado. Approximately $2.65 million of those are long-term liabilities, including a Paycheck Protection Program loan of $736,164.

The franchises combined brought in revenues of $5.26 million from January to the end of July this year, but it had losses totalling $646,210 in that same period before taxes.

The Fort Collins location at Harmony Market Center had revenues of $657,885 up to July 31, but posted a pre-tax loss of $36,835. The Broomfield location in Flatiron Crossing posted revenues of $524,535 and a loss of $57,795.

Whiting Petroleum ends bankruptcy after shedding $2.4B in debt

DENVER — Whiting Petroleum Inc. (NYSE: WLL) has exited Chapter 11 bankruptcy, months after becoming the first major oil producer in Colorado to declare bankruptcy under the financial pressures imposed by the pandemic.

In a statement, the Denver-based company said its newly issued shares began trading on the New York Stock Exchange after issuing one new share to every stockholder for every 75 shares they held pre-bankruptcy.

The majority of those new shareholders were previously long-term bondholders who exchanged their debt for ownership stakes in the company. Whiting previously held a total debt load of $3.43 billion pre-bankruptcy, but now places its pro forma debt as of Tuesday at $425 million.

Whiting was the 10th-largest producer in Weld County in 2019 with 3.4 million barrels of oil and 10.2 million metric cubic feet of natural gas produced from 881 wells, according to Colorado Oil and Gas Conservation Commission records. Its Colorado operations were solely within Weld County.

Whiting was the first of the large-scale producers in the state to file bankruptcy as the pandemic ground travel and fuel demand to near-record lows and tipped an industry already heavy in debt into crisis. Whiting itself cut a third of its workforce in late July, amounting to 254 people.

EXPANSIONS

Bike retailer The Pro’s Closet raises $12 million, moves headquarters to Louisville

LOUISVILLE — Online used bike retailer The Pro’s Closet has completed a $12 million funding round and is moving its headquarters from Boulder to Louisville.

The company said Wednesday that the funding, which was led by venture-capital firms The Foundry Group and Edison Partners, brings the total investments in The Pro’s Closet to more than $27 million.

The Pro’s Closet will also move its headquarters from 2845 29th St., Suite C, in Boulder to the 137,000-square-foot space at 1900 Taylor Ave. in Louisville, which was formerly the North American headquarters for the outdoor brand Fenix, whose subsidiaries include Fjallraven. The Pro’s Closet will occupy 40,000 square feet and 24 shipping bays at 1900 Taylor, according to a press release.

Sheltair completes new FBO, hangar complex at Rocky Mountain Metropolitan Airport

BROOMFIELD — Sheltair Aviation Services LLC has opened its new terminal and hangar spaces at Broomfield’s Rocky Mountain Metropolitan airport after a little more than a year’s worth of construction.

The project is anchored by a 10,400-square-foot terminal and 4,455 square feet of office space, along with 11 acres of apron space and 31,050 square feet of cabin-class hangar space for airplane storage. Sheltair broke ground on the project last August.

Hydrate IV Bar ventures into franchising with Fort Collins location

FORT COLLINS — Hydrate IV Bar, an IV therapy spa franchise based in Denver, opened the brand’s first franchise location at 222 Linden St. in downtown Fort Collins in mid September. The newest spa location is one of 10 expected to open by the end of 2021.

Hydrate IV Bar has five corporate locations in the Denver/Boulder area; it recently launched a nationwide franchise program.

The company was founded in 2016 by Katie Wafer, a former Denver Broncos cheerleader and medical sales professional. Wafer struggled to maintain her energy level and, after visiting IV clinics, she decided to create a company that was positioned as a spa instead of a clinic, the company said in announcing the new Fort Collins location.

New owners acquire Dickens restaurant in downtown Longmont

LONGMONT — New owners have taken charge of one of Longmont’s oldest restaurant venues, The Dickens at Third Avenue and Main Street, and are finding ways to navigate the effects of COVID-19.

Noella Colandreo and Anthony Sanschagrin took over the classic downtown eatery on March 1, just in time for the pandemic to shut down the operation. “Anthony and I have always been able to roll with the punches, but this was extreme,” Colandreo told BizWest.

The couple, who ran a catering company in Tampa, Florida, before moving to Colorado, used the time to rebrand and figure out a path forward. The restaurant at 300 Main St. is now called Dickens 300 Prime, and it features a new menu focused on steak and seafood, Colandreo said.

MERGERS & ACQUISITIONS

National landscaper acquires Fort Collins’ Jordan’s Tree Moving

FORT COLLINS — National landscaping company SavATree has acquired Jordan’s Tree Moving & Maintenance in Fort Collins.

In a statement, the Bedford Hills, New York-based SavATree said it will integrate the staff from Jordan’s into its existing SavATree location in the city.

“We are thrilled to join forces with Jordan’s Tree Moving & Maintenance,” said SavATree executive chairman Daniel van Starrenburg. “Our shared commitment to exceptional service and customer satisfaction will ensure a smooth transition for all clients and allow us to expand our reach in the west.”

SavATree has 40 locations across the U.S., including offices in Firestone, Denver and Centennial that were acquired as independent tree service companies. The majority of its locations are on the upper East Coast.

Circle Graphics acquires California wall decor firm

LONGMONT — Circle Graphics Inc., a Longmont-based producer of large-format digital graphics, has acquired Santa Cruz, California-based Bay Photo Inc.

Bay Photo, founded in 1976, makes photographic wall décor, albums, and specialty prints, according to a Circle Graphics news release.

Terms of the deal were not disclosed.

“Bay Photo enhances Circle’s presence in the professional photography and artist markets while expanding Circle’s product portfolio into the rapidly growing segments of metal prints, albums, and photobooks,” Circle Graphics CEO Andrew Cousin said in the release.

The Bay Photo deal marks Circle Graphics’ second acquisition of the year. In January, the firm bought Ohio-based digital billboard printing firm Metromedia Technologies Inc.

LAWSUITS

Boulder landlord seeks damages, unpaid rent in lawsuit

BOULDER — A Boulder landlord has sued a former tenant for alleged unpaid rents.

Fathym Inc., which occupied 1916 13th St., Suite A, was sued by its landlord, Wencel Building LLC, on July 15 in Boulder County District Court, in a complaint alleging that Fathym failed to pay rent beginning in April.

An attorney for Boulder law firm Dietze and Davis PC, which represents Wencel, did not respond to requests for comment. A message left on Fathym’s voice mail was not returned.

Fathym was founded in 2015. Its products include a modular app-development framework and a machine-learning weather-forecasting platform.

According to the complaint, Fathym signed a four-year lease to rent the 1,943-square-foot space in December 2018, with the lease expiring in February 2022. Fathym’s monthly rent was $8,289.75, which included both base rent and Fathym’s share of operating expenses.

After Fathym failed to pay rent in April, May, June or July, Wencel posted a compliance demand on the premises on July 2, according to the complaint. At the same time, Wencel determined that Fathym had abandoned the premises while leaving behind a “significant amount of the Defendant’s personal property … including but not limited to office furniture.”

In the complaint, Wencel sought damages of $33,159 in unpaid rent, plus interest and late fees; rent payments through February 2022; and repossession of the premises.

On July 24, a Boulder County District Court judge granted a default judgment in favor of Wencel and filed a writ of restitution with the Boulder County Sheriff’s Department to repossess the premises.

Fathym Inc. was included in a database listing recipients of Payroll Protection Program loans, with a loan between $150,000 and $350,000, according to the U.S. Small Business Administration.

Outdoor retailer Fjallraven sued by Boulder landlord for unpaid rent

BOULDER — The landlord for Swedish outdoor retailer Fjallraven’s Boulder store sued the brand, accusing the company of not paying rent from April through August of this year.

Landlord Ten Eleven Pearl LLC filed suit Aug. 28 in Boulder County District Court, seeking $127,381 in damages for unpaid rent and other fees. It is also asking the court to repossess the 3,830-square-foot property at 1048 Pearl St., Suite 115.

According to the complaint, Fjallraven entered a seven-year lease with two five-year options with Ten Eleven Pearl in June 2016. Fjallraven’s monthly dues include basic rent and “additional rent,” which included Fjallraven’s pro rata share of operating expenses, according to the suit.

Fjallraven failed to pay either base rent or additional rent from April through August, the complaint alleges. On May 13, Ten Eleven Pearl applied Fjallraven’s $23,072 security deposit against unpaid rent. Fjallraven failed to replace the security deposit, according to the lawsuit.

Ten Eleven Pearl alleges that it notified Fjallraven in writing of its failures to pay rent on May 13, then again on July 10 and Aug. 20.

The Boulder store is located in the 175,000-square-foot PearlWest office and retail development at 1048 Pearl St., just west of the Pearl Street Mall.

FUNDINGS

Plant-based meat startup Emergy raises $28.2M in Series A

BOULDER — Emergy Inc. has raised just more than $28.2 million in its Series A funding round as it continues to try to perfect plant-based steaks and other cuts of meat.

The Boulder company raised the money from 44 investors, according to a disclosure to the U.S. Securities and Exchange Commission.

Emergy’s goal is to create a process to make plant-based meat similar to Beyond Meat Inc. (Nasdaq: BYND) and Impossible Foods. But rather than producing foods similar to ground meat such as hamburger or sausage, Emergy is trying to create whole cuts of meat, such as chicken breasts or steak.

Tyler Huggins and Justin Whiteley, the company’s co-founders, moved the firm to Boulder from Chicago, where they had a $6 million grant from the U.S. Department of Energy to research ways of making food with fewer resource inputs. The pair have doctoral degrees from the University of Colorado Boulder.

Boulder’s Cloud Agronomics raises $6M seed round

BOULDER — Cloud Agronomics Inc. has raised an initial seed round of $6 million as it prepares to expand its platform to monitor the release of greenhouse gases from farmland in multiple countries.

In a statement, the Boulder company said the round was led by Washington, D.C.-based SineWave Ventures LP, a capital fund that invests in public sector-facing technology companies. It also said it plans to use the funds to monitor more cropland in the U.S., Australia and Brazil.

It last filed a disclosure to the U.S. Securities and Exchange Commission on June 22 stating it had raised $4.67 million out of an $8 million total round. That filing shows the company is registered in Englewood, but its offices are headquartered in Boulder.

Cloud Agronomics uses satellite data and machine learning to remotely measure nutrient levels that later determine if row crops such as corn and soybeans are at risk of stress or disease, and ultimately predicts yields.

Feds give Longmont, Broomfield airports combined $1M for improvements

LONGMONT and BROOMFIELD — The U.S. Department of Transportation is giving just more than $1.05 million to Longmont’s Vance Brand Airport and Broomfield’s Rocky Mountain Metropolitan Airport in its latest round of infrastructure grants.

In a statement, the department said Vance Brand Airport will receive $722,222 for drainage and erosion control, while the Rocky Mountain Metropolitan Airport will receive $337,091 for general taxiway improvements.

In particular, Vance Brand will relocate a drainage ditch out of a runway safety area to become compliant with federal aviation regulations. The project is slated to begin and end in November.

The U.S. DOT gave a total of $44.3 million in grants to Colorado airports in the round, including $2.62 million to Denver International Airport for ground-based pollution emissions reductions and just more than $8 million to Gunnison-Crested Butte Regional Airport for an expansion of its terminal building.

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