Waukesha’s 83-year-old Golden Guernsey Dairy plant filed for Chapter 7 bankruptcy in Delaware and closed abruptly on Jan. 5. The California capital firm that formerly owned the Wisconsin facility criticized the workers’ union, pricing pressures and operating expenses for their roles in prompting the decision.
In the wake of the closure, over 100 employees are searching for new jobs and benefits. The Workforce Development Center hosted a job fair specifically for these individuals, who were allowed to return to the plant to claim their personal effects. The new bankruptcy trustee has been actively searching for purchasers and is hosting tours of the site. He believes that buyers will be interested in the chance to purchase the plant free of encumbrances.
The Golden Guernsey trustees hope to create new jobs by selling the complete facility to someone who can resume its operation. The appeal of a fresh financial start, free of the need to recover business assets following a liquidation, could reduce some of the financial challenges typically associated with buying a newly bankrupt firm.
The outcome may depend on how long negotiations take. In many Chapter 7 proceedings, the trustee’s need to recoup money for the debtor’s creditors eventually leads to asset liquidation or mortgage modification. For businesses struggling with debt, bankruptcy can be a good way to stop creditor harassment, but it does come with financial challenges of its own for employees and others affected by the proceedings. In many cases, individuals and firms that are considering filing for Chapter 7 may choose to consult with experienced bankruptcy law attorneys about the best course of action.
Source: Greater Milwaukee Today, “Is there hope for Golden Guernsey?” Sarah Pryor, Jan. 26, 2013