BIOTA Brands of America, a Telluride-based bottled-water company, will go through with its foreclosure sale today as ordered by a U.S. Bankruptcy Court judge last month.
An attempt to delay the foreclosure sale Tuesday was denied.
BIOTA – or Blame It On The Altitude – owes a combined $10.5 million to more than 100 creditors, according to an April 17 bankruptcy filing with the Colorado District of the U.S. Bankruptcy Court.
The company is disputing the $7.5 million it owes its largest creditor, United Parcel Service’s lending arm UPS Capital Business Credit.
BIOTA will go through with the foreclosure sale, though it plans to launch nine counterclaims against UPS, each asking for $10 million in damages for predatory lending practices, said Jeffrey Hart, a Plymouth, Mich.-based attorney for BIOTA.
“This case is really just starting,” Hart said.
UPS Capital officials could not be reached for comment regarding the potential countersuit, but a company spokesman earlier Tuesday called BIOTA’s actions and words unfortunate.
A portion of the $7.5 million revolves around a U.S. Department of Agriculture-sponsored loan that UPS Capital was responsible for collecting – and that BIOTA defaulted on in July 2005, said Norman Black, a spokesman with Atlanta-based UPS.
“These are USDA, federally guaranteed loans. … The real holder of this loan is the American taxpayer – it’s you and me,” Black said. “This loan went into default two years ago. We’ve exhausted every avenue that we could see.”
Hart says BIOTA, which made its name using biodegradable bottles, has found a group of investors to buy the company’s assets and help pull it out of debt. The investors will buy the assets either at today’s foreclosure sale of BIOTA’s bottling plant in Ouray or at a later date during the legal 75-day redemption period, he said.
Hart declined to name the potential investors or specify how many there are. BIOTA owner David Zutler could not be reached for comment. Another company executive declined to comment.
BIOTA’s ongoing financial troubles were exacerbated last year when in-house and independent lab tests of the Ouray plant’s water tested positive for mold and bacteria, including E. coli. The water was reportedly caught in time, and none of it made its way to consumers.
But the damage was done. BIOTA had to shut down its plant last September, eventually reopening in December.
UPS Capital took legal action against BIOTA months before that, in May 2006.
Staff writer A.J. Miranda can be reached at 303-954-1381 or amiranda@denverpost.com.
