Borden Dairy Co. files for bankruptcy citing unbearable debt.
Privately held U.S. dairy processor and distributor, Borden Dairy Co., has filed for for bankruptcy, becoming the second major U.S. milk seller to do so in two months, according to Bloomberg, as competitive pressures, declining consumption, and falling profits made its debt load unsustainable.
Borden, one of America’s oldest and largest dairy companies said it had net sales of $1.2 billion in 2018, but that resulted in a net loss of $14.6 million. From January 2019 through December 7, Borden reported a net loss of $42.4 million, according to its bankruptcy filing, CNN Business reports. In its Chapter 11 filing in Delaware, Borden Dairy listed assets and liabilities of between $100 million and $500 million. The case is Borden Dairy Co., 20-10010-CSS, U.S. Bankruptcy Court for the District of Delaware.
“While milk remains a household item in the United States, people are simply drinking less of it (…) In parallel, since the turn of the century, the number of U.S. dairy farms has rapidly declined,” said Chief Financial Officer Jason Monaco in court papers.
The Dallas-based company, founded more than 160 years ago, said in a statement that normal operations will continue while it works out a recovery plan. To continue operating in bankruptcy, Borden needs to tap an account containing $26.6 million that it established in 2017 to pay for a settlement with two pension funds, Monaco said.