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Golden Guernsey files for bankruptcy protection

WAUKESHA, Wis. (AP) -- Golden Guernsey, the 83-year-old dairy processor that closed abruptly in southeastern Wisconsin and left area schools scrambling for milk, has filed for bankruptcy.

The Los Angeles private equity firm that bought Golden Guernsey in 2011, OpenGate Capital, said it sought Chapter 7 bankruptcy protection in Delaware bankruptcy court.

OpenGate CEO Andrew Nikou said in a statement late Tuesday that pressure to lower prices, as well as nonnegotiable operating expenses led to the decision to close the plant in Waukesha.

"This was a very difficult decision given the loss of jobs and disruption to milk delivery service, yet it had to be made. The closure of the plant is not a reflection of the hard work contributed by the Golden Guernsey family of employees," Nikou said. "Unfortunately, when expenses overwhelm revenue for too long, and we are unable to achieve cooperation from the people with whom we do business, the business cannot be sustained."

The sudden closure Saturday left more than 100 people without jobs and had schools scrambling to line up new milk suppliers. State officials said OpenGate had not provided the 60-day notice for a plant closing as required by Wisconsin law.

A Golden Guernsey employee who lost his job, Robert J. Storm, Jr., filed a complaint with the Department of Workforce Development over the plant closure, according to the Milwaukee Journal Sentinel (http://bit.ly/VFRDpB ).

Storm said he thought the "wheels were in motion" a month ago to close the plant, yet it failed to notify the state.

The number of milk bottlers continues to decline in the United States. There are about 400 beverage milk plants in the U.S., down from more than 600 in 1996 and about 2,500 in 1975, according to the Center for Dairy Profitability at University of Wisconsin-Madison.

In 2011, total U.S. beverage milk sales were about 6 billion gallons, the lowest level since 1984, according to the U.S. Department of Agriculture.


Information from: Milwaukee Journal Sentinel, http://www.jsonline.com