Borden Dairy, one of the nation’s biggest and oldest dairy producers, has filed for Chapter 11 bankruptcy. The announcement comes not long after Dean Foods, the largest dairy company in the United States, declared bankruptcy in November 2019, making it the second major milk producer to do so in the past two months.
The Dallas-based company, which has a workforce of around 3,300 employees (22 percent who are covered by a collective bargaining agreement) cited that it cannot afford debt load and pension obligations. Borden intends to use the court process to pursue a financial restructuring designed to reduce its current debt load and maximize value in order to position itself for long-term success.
In a statement released by the dairy producer, CEO Tony Sarsam stated, “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.”
Sarsam continued, “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.”
The dairy, founded in 1857 by Gail Borden, Jr., operated 13 milk processing plants and almost 100 branches across the country that produces nearly 500 million gallons of milk for customers in the grocery, mass market, club, foodservice, hospitality, school, and convenience store channels. It was the first company to develop a patent for the process of condensing milk, as well as the first to use glass milk bottles.