Bankruptcy means 300 jobs gone

Professional Veterinary Products, an Omaha-based firm that has struggled to pay down $25 million in debt, reported Friday that it had filed for bankruptcy and notified employees that their jobs would be eliminated Oct. 11.

According to the company's filing with the Securities and Exchange Commission, Professional Veterinary Products will continue to operate under Chapter 11 bankruptcy protection as a "debtor-in-possession."

The company employs 300 people, most of them at 10077 South 134th St.

Company officials did not return phone calls, although they issued a press release announcing the bankruptcy filing.

In most cases, a company filing for Chapter 11 proposes a reorganization plan to keep its business alive and pay creditors over time. However, according to minutes of a recent board of directors meeting, PVP over the last few weeks has attempted to sell all or parts of the company to competitors or to private equity groups.

Two competitors, IVESCO LLC of Iowa Falls, Iowa, and Lextron of Greeley, Colo., showed interest but "do not appear to be viable candidates," according to the minutes.

A few weeks ago, Professional Veterinary Products notified the veterinary clinics and hospitals that use its medications and equipment that its future was unstable.

One of those customers was the Ralston Veterinary Clinic, where Janine Formanek is CEO.

The clinic has been a PVP shareholder since 1983, Formanek said, adding that the company was once "top-notch."

"For the longest time they were the icon, they were awesome. They had a great reputation in the community," Formanek said.

Over the last two years, however, things changed, she said.

The company eliminated some of its offerings, such as veterinary and inventory training, and laid off some workers, Formanek said. Those moves signaled to customers and shareholders that there were problems, she said.

PVP reportedly laid off 30 workers last February. Earlier this month the company announced it would close a distribution facility in York, Pa., eliminating another 30 jobs.

"I feel very sad that they're not making it," Formanek said.

Veterinarians generally work with multiple distributors to get the best prices, Formanek said, so Ralston Veterinary Clinic will be able to get the medications and supplies it needs.

"The change for us is that we don't have them just down the street" to get products on a moment's notice, she said.

PVP initiated a number of business ventures over the last 12 to 18 months whose success depended on higher revenues and greater profit margins, said a source close to the company who spoke on condition of anonymity. But the sluggish economy, competitive pressures and lower sales hurt performance, the source said.

The company defaulted on a credit agreement with Wells Fargo Bank on July 12, according to an SEC filing.

According to minutes of the board meeting, Wells Fargo will be paid first. Administrative claims and other creditors will be paid second, with unsecured creditors third in line.

The company's 1,900 shareholders, most of whom are veterinary clinic or hospital owners, will be paid last if there is any money left, according to the minutes.

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