The drought has dug a deeper and drier hole for Pike Family Nurseries.

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PHIL SKINNER/AJC (ENLARGE)

According to its bankruptcy filing, Pike owes $5.6 million to at least 20 lawn and garden businesses across the Southeast, West and Midwest.

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The 50-year-old Norcross-based company will be auctioned on Tuesday. Anything and everything owned by the garden retail and wholesale company is for sale.

Pike filed for Chapter 11 bankruptcy protection on Nov. 14, blaming Georgia's prolonged drought and watering restrictions. The company could still reorganize in bankruptcy if its creditors don't approve a sale at auction.

Pike stores will remain open through the auction process.

Wayne Juers, a vice president at Pike, said Friday the decision to go with an auction was not easy, but the continued drought made it hard to make another choice.

"Really, we have not had relief in the water situation," he said. "It did not make good sense to fight our way out and lose."

At least five companies have lined up to bid on the company's assets, said Pike's bankruptcy attorney, Rob Williamson, of the firm Scroggins & Williamson in Atlanta.

Williamson was not authorized to name the companies that have made bids for Pike.

He did say most bids are from companies that would use a Pike's acquisition to make a strategic play in Atlanta's nursery market. Private equity firms also have expressed interest, he said.

The sale comes as Pike, a private company, is about to start its spring season on March 1, Juers said. Dun & Bradstreet reports Pike had estimated sales of $68 million in 2007. Pike is held by Roark Capital Group, a private equity firm in Atlanta. A call to the company was not returned by deadline.

Pike has between 500 and 700 employees at its 15 stores and five gardening centers, Juers said. He said employees are obviously anxious because so much is unknown.

"As far as our employees are concerned, they are feeling good about it," he said. "But, I mean, it is a little nerve-wracking, but they are doing well."

The company also has retail locations in Birmingham, Ala., and Charlotte, N.C.

At one time, Pike had more than 20 Georgia stores, four exterior wholesale divisions, three stone and aquatic centers and the Pike Design Group.

The auction, which will not be open to the public, will take place at the law offices of King & Spalding in Midtown.

If Pike and its creditors agree to a sale, a federal bankruptcy judge will review the final offer at a Feb. 28 hearing, when the bid will be made public.

The point of the process, said Williamson, is to get the highest and best price for creditors.

According to its bankruptcy filing, Pike owes $5.6 million to at least 20 lawn and garden businesses across the Southeast, West and Midwest -- including Pennington Seed in Madison, Border Concepts in Charlotte and Gerson International in Kansas.

Pike secured $11.75 million in debtor-in-possession financing to fund its operations when it entered bankruptcy in November.

Neal Aronson, of Roark Capital, told the Atlanta Journal-Constitution in a Feb. 1, 2008 story, that Pike "isn't overleveraged; it doesn't have a lot of debt. It's just unfortunate that the drought was out of everybody's control."

-- Researcher Nisa Asokan contributed to this report.