Dean Foods Files For Chapter 11 Bankruptcy

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(Undated) — Dean Foods, America’s largest milk processor has filed for bankruptcy. Part of the problem, according to industry officials, are fewer people are consuming cow’s milk, and instead are turning to plant based alternatives, such as soy milk, almond milk, and rice milk. According to CNN Business, Dean Foods lost seven percent of sales in the first half year of 2019, and profits fell by 14 percent. Dean Foods stock has lost 80 percent this year. The company has more than 30 different brands nationwide, including those familiar to this area: DairyPure, Land O’Lakes, TruMoo and Meadow Gold. The company has not been able to fund all of its retired employees pensions, and on Tuesday filed for Chapter 11 bankruptcy protection in order to keep the company operating.


Dean Foods also announced that it is engaged in advanced discussions with Dairy Farmers of America,
Inc. (“DFA”) regarding a potential sale of substantially all assets of the Company. If the parties ultimately reach agreement on the terms of a sale, such transaction would be subject to regulatory approval and would be subject to higher or otherwise better offers in the bankruptcy.
Dean Foods is operating in the ordinary course of business and remains focused on providing its customers with wholesome, great-tasting dairy products and the highest levels of quality, service and value. The Company has received a commitment of approximately $850 million in debtor-in-possession (“DIP”) financing from certain of its existing lenders, led by
Rabobank. Following court approval, the Company expects to use the DIP financing, together with cash on hand and operating cash flows, to support its continued operation throughout this process, including payment of employee wages and benefits without interruption and payment to suppliers and vendors in full under normal terms for goods and services provided on or
after the filing date.” KLEM news reached out to Dean Foods to inquire about the Le Mars processing plant. Anne Divjak, the Vice President of Government Relations and External Communications responded in an email message saying, “It remains business as usual for us. We are continuing to provide customers with an uninterrupted supply of high quality dairy products and are relying on our dedicated employees and valued milk
suppliers to help us do this. Any future decisions regarding our plants, including the one in Le Mars, will be based, on market conditions and the needs of the business.”

 

 

(Undated)