Just two months after concluding a strategic review, Dean Foods Co. (DF) has filed for bankruptcy protection with plans to sell its assets.
The Dallas dairy company and 42 affiliates submitted Chapter 11 petitions on Tuesday, Nov. 12, in the U.S. Bankruptcy Court for the Southern District of Texas.
In a statement, Dean Foods said it was in advanced sale discussions with Dairy Farmers of America Inc. The Kansas City, Kan., cooperative produces Borden cheese and Keller’s Creamery butter, and its members deliver milk to Dean Foods. Court papers show DFA is the debtor’s third-largest unsecured creditor, owed $172.92 million.
Dean Foods intends to file bidding procedures that could center on the DFA deal and to pursue development of a standalone reorganization plan with creditors.
A first-day hearing has yet to be set before Chief Judge David R. Jones on motions including a requests for interim use of roughly $850 million in debtor-in-possession financing from existing lender Rabobank NA. Securities and Exchange Commission filings show the DIP would include a $234.8 million new-money revolving credit facility and refinance about $189 million in revolving debt.
Jones on Tuesday approved joint administration of the cases, with Southern Foods Group LLC as the lead debtor.
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