Dallas-based Borden is filing for bankruptcy protection, the second major US dairy to do so in as many months.
The company released a statement Monday saying they have "initiated voluntary reorganization proceedings" in Delaware and that they plan "to use the court process to pursue a financial restructuring designed to reduce its current debt load, maximize value and position the company for long-term success."
Borden Dairy Co. -- whose smiling mascot Elsie the cow first appeared on milk cartons in the 1930s -- says it will continue operations during its financial restructuring.
“Borden is EBITDA-positive and growing, but we must achieve a more viable capital structure,” said Borden CEO Tony Sarsam, in a prepared statement. “This reorganization will strengthen our position for future prosperity. Over the past 163 years, we have earned the distinction of being one of the most well-recognized and reputable national brands. We remain committed to ‘The Borden Difference,’ which is our promise to be the most service-oriented dairy Company that puts people first. We will continue serving our customers, employees and other stakeholders and operating business as usual throughout this process.”
American refrigerators are increasingly stocked with milk substitutes made from soy or almonds, hammering traditional milk and cheese producers like Borden, founded in 1857.
“Despite our numerous achievements during the past 18 months, the Company continues to be impacted by the rising cost of raw milk and market challenges facing the dairy industry,” Sarsam explained. “These challenges have contributed to making our current level of debt unsustainable. For the last few months, we have engaged in discussions with our lenders to evaluate a range of potential strategic plans for the Company. Ultimately, we determined that the best way to protect the Company, for the benefit of all stakeholders, is to reorganize through this court-supervised process.”
Dean Foods, the nation's largest milk producer, filed for bankruptcy protection in November. Both dairies are based in Dallas.