Another nursery in Oregon's Willamette Valley has filed for bankruptcy protection in the midst of the industry-wide downturn.

D. Wells Industries, a 200-acre nursery based in Aurora, Ore., has filed for Chapter 12 bankruptcy, which allows family farmers and fishermen to continue operating while forming debt-repayment plans with creditors.

"I just didn't want to keep digging the hole deeper," said Dan Wells, the firm's president.

Sales of ball-and-burlap ornamental nursery stock, the nursery's specialty, are dismal, he said. "People just flat stopped buying."

The company reported more than $2 million in debt and $12 million in assets, according to bankruptcy documents filed in early November.

With a projected income of less than $500,000 in 2009, the firm's revenues have fallen by roughly half since last year, according to the filing.

Its 2008 sales were also half of the prior year's, which means the company is operating on roughly one-quarter of its previous income, said Wells.

"I've never seen it like this," he said, noting that the lack of cash flow in the U.S. has destroyed demand for nursery stock. "I think everybody is in the same boat."

John Aguirre, executive director of the Oregon Association of Nurseries, said many producers are struggling, particularly if they borrowed to expand their operations before the recession hit.

"The economic downdraft is so severe that even companies that are well managed may find themselves in an uneconomical position," Aguirre said.

The industry's financial woes have affected the finances of the OAN, a member-funded organization.

"We're having to slice costs big time," Aguirre said.

D. Wells Industries' filing follows that of Teufel Nursery, based in Beaverton, Ore., which filed for Chapter 11 in June. Proceedings are ongoing in that case.

Clackamas Greenhouses, based in Aurora, Ore., filed for Chapter 12 bankruptcy in March. The company's debt-repayment plan was finalized in October.

David Niklas, the firm's president, said the plan will allow Clackamas Greenhouses to pay creditors during periods of peak cash flow. If all goes as expected, the firm will work its way out of debt in five years, he said.

"I'm feeling confident about the plan," Niklas said.

-- Mateusz Perkowski