Most would say that they have a love-hate relationship with debt. While debt is commonly incurred when individuals make large purchases or a business expands, when debt gets out of controls it can quickly become problematic. Even when a company has been able to manage their debts and liabilities, this ability can drastically alter when the market changes or a business deal goes bad. In order to overcome these financial woes, companies may have to make major decisions, such as filing for bankruptcy.
According to recent reports, Dean Foods Co. filed for Chapter 11 bankruptcy. Dean is one of the top milk processors in the U.S., and the company is in the process of having advanced talks about a sale to Dairy Farmer of America Inc.
Reports indicate that Dean listed both their assets and liabilities in the court paper they recently filed. Each are estimated to be as much as $10 billion. In a statement made by the company, it has commitments of $850 million in bankruptcy financing for their existing lenders.
This filing has allowed Dean to maintain operations while it works out a plan to pay their creditors and make their business profitable again. It is suspected that their current situation is based on the loss of their biggest customer, Walmart Inc., and the falling demand for milk due to the popularity of nut milk and bottled water.
Although bankruptcy carries with it a negative reputation, it is a process that can provide various benefits and financial relief. While it is not an easy step to take, it can be the best solution available for a company. Therefore, it is important to be well informed of this process, understanding how a bankruptcy filing could be a valuable step to take.