American milk giant files for bankruptcy amongst industry challenges
Rising costs of raw milk and new market challenges are said to be amongst the reasons for the company’s reorganisation.
Borden, one of America’s largest and oldest dairy processors and distributors, has announced that it and certain affiliates have initiated voluntary reorganisation proceedings in the District of Delaware under Chapter 11 of the Bankruptcy Code.
The company reportedly intends to use the court process to pursue a financial restructuring designed to reduce its current debt load, maximise value and position the company for long-term success. Borden has said that it plans to continue operating in the ordinary course of business, under the court’s supervision, and remains focused on being the most service-oriented dairy company that offers nutritious products consumers enjoy.
“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,” Borden CEO, Tony Sarsam, explained. “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 reorganise 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 reportedly be seeking court approval for these requests during the coming days and intends to work closely with creditors, customers and employees to identify value-maximising restructuring plans that will benefit all stakeholders.