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Borden Dairy Co. announced late Sunday that it has voluntarily filed for Chapter 11 bankruptcy protection.
The Dallas-based company plans to pursue a financial restructuring to reduce its debt load and position the milk processor and distributor for “long-term success,” according to a news release.
"Despite our numerous achievements during the past 18 months, the Company continues to be impacted by the rising cost of raw milk and market challenges facing the dairy industry," CEO Tony Sarsam said in the release. "These challenges have contributed to making our current level of debt unsustainable. For the last few months, we have engaged in discussions with our lenders to evaluate a range of potential strategic plans for the Company. Ultimately, we determined that the best way to protect the Company, for the benefit of all stakeholders, is to reorganize through this court-supervised process."
In the filing, Borden listed estimated debts and liabilities, both in a range from $100 million to $500 million. To see Borden's filing with the U.S. Bankruptcy Court for the District of Delaware and a list of major creditors, click here. The case is No. 20-10010.
Sarsam told the Business Journal late Sunday that comparisons shouldn’t be drawn between Borden’s decision to file for Chapter 11 and the bankruptcy filing of the country’s largest milk producer Dean Foods, which sought Chapter 11 protection in November. “Our situation differs in fairly significant ways,” Sarsam said.
“All of our businesses are EBIDTA-positive and we’re growing. Dean is shrinking, and they’ve been negative for multiple quarters in a row. Their filing was largely about operational problems they couldn’t solve,” said Sarsam.
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