Dairy Owned By Private Equity Firm Files For Chapter 7 Bankruptcy

by Tara Arick on January 16, 2013 · 0 comments

in Bankruptcy

- From LexisNexis® Mealey’s™ Daily Legal News.

The Golden Guernsey Dairy on Jan. 8 filed for Chapter 7 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware, citing both assets and liabilities between $ 10 million and $ 50 million (In Re: Golden Guernsey Dairy LLC, No. 13-10044, Chapter 7, D. Del. Bkcy.).

The dairy, which is owned by private equity firm OpenGate Capital LLC, shut down its plant on Jan. 5.

Open Gate Capital

OpenGate Capital acquired Golden Guernsey in September 2011 from Dean Foods after the U.S. Department of Justice required Dean Foods to sell Golden Guernsey to resolve antitrust concerns that Dean Foods’ share of the school milk supply business was too large, sources said.

When OpenGate Capital acquired Golden Guernsey, the acquisition terms included an exclusive and fixed-price milk supply agreement and the assumption of a legacy union contract, sources said.

Expenses

OpenGate Capital successfully implemented new sales and operations strategies that yielded an increase in sales of 20 percent; however, as Golden Guernsey was suffering under the pressure to meet demands for lower cost products, it was unable to successfully reduce its expenses, sources said.

Golden Guernsey is represented by Mark L. Desgrosseilliers of Womble Carlyle Sandridge & Rice in Wilmington.

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