Jan 9 (Reuters) - Private equity-backed milk processor Golden Guernsey Dairy LLC filed for bankruptcy and said will liquidate after it failed to cut operating costs.
The company, backed by Los Angeles-based firm OpenGate Capital LLC, filed for Chapter 7 bankruptcy protection on Tuesday in a U.S. bankruptcy court in the district of Delaware.
OpenGate bought Wisconsin-based Guernsey Dairy from Dean Foods Co in September 2011 to resolve anti-trust concerns about Dean Foods’ large share of school milk supplies in the state.
The private equity firm said it increased sales by 20 percent after it bought Golden Guernsey from Dean Foods but was unable to reduce costs in a meaningful manner, given some of its legacy relationships.
Golden Guernsey, an 83-year-old company, supplies milk and milk products to schools, grocery stores and retailers in Wisconsin, Illinois, Minnesota and Iowa.
The company’s only facility, which employs over 100 people, shut abruptly on Saturday.
“We have to make realistic decisions about our investments, and the reality is that the Golden Guernsey business was unable to achieve financial autonomy given the pressure to lower prices and seemingly non-negotiable operating expenses,” OpenGate Capital Chief Executive Andrew Nikou said.
The company listed assets and liabilities of between $10 million and $50 million in its bankruptcy petition.
The case is In re: Golden Guernsey Dairy LLC, U.S. Bankruptcy Court, District of Delaware, No:13-10044.