Borden Dairy announced the company as well as certain affiliates filed for Chapter 11 bankruptcy.
In a statement, the company said it intended to use the court process to pursue a financial restructuring designed to reduce its current debt load, maximize value and position the company for long-term success. Borden planned to continue operating as usual under the court’s supervision.
“Borden is EBITDA-positive and growing, but we must achieve a more viable capital structure,” said Borden CEO Tony Sarsam. “This reorganization will strengthen our position for future prosperity. We will continue serving our customers, employees and other stakeholders and operating business as usual throughout this process.”
Founded in 1857, last year marked several major milestones for the Company, including the revival of Borden’s beloved spokescow Elsie, the brand’s reintroduction in Ohio, and the launch of several products that earned local and national media acclaim, such as State Fair-inspired milk flavors, Gingerbread Eggnog and Kid Builder. The Company’s growth last year outpaced the industry as it increased year-over-year sales.
“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,” Sarsam said. “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.”
Stressing that it is “business as usual” at Borden, Sarsam noted that the Company had proactively filed expected motions as part of the court-supervised process, which allow it to pursue day-to-day operations. The Company will be seeking court approval for these requests during the coming days and intended to work closely with creditors, customers and employees to identify value-maximizing restructuring plans that will benefit all stakeholders.
“Borden Dairy is a heritage American brand that has been in business since 1857,” Sarsam said. “We have a very tenured workforce of 3,300 people who live and breathe our values of teamwork and creative problem solving, and I am extremely confident and optimistic about our continued success in the future.”
This comes just months after Dean Foods filed for bankruptcy protection in November.
-Kaitlyn Riley
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