Dean Foods and substantially all of its subsidiaries initiated a voluntary bankruptcy proceedings in the Southern District of Texas, the Dallas-based company said in a press release. At the same time the company is in talks with the Dairy Farmers of America to explore a sale of substantially all of its assets.
In the interim, Dean Foods is operating as usual after receiving a commitment of around $850 million in debtor-in-possession financing from some of its lenders.
Dean Foods' business was impacted by a combination of consumers opting for non-dairy milk products and competition from cheaper private label products, according to CNBC. The company reported a net loss in seven of the last eight quarters.
Dean Foods CEO Eric Beringause said the company's bankruptcy decision represents the "best pat forward."
"I am confident we have the right people in place to lead us through this process," the CEO said.
Dean Foods expects to receive court approval to continue supporting its business operations. The company also expects to receive court approval to conduct a sale of itself, which is consistent with the U.S. Bankruptcy Code and work with creditors to evaluate a stand-alone plan of reorganization.
The stock most recently closed at 80 cents a share
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