Editor’s update: Following an afternoon hearing on March 19, U.S. Judge David Jones said he would sign an order outlining procedures and the timetable regarding Dean Foods’ bankruptcy proceedings. As described below, Dairy Farmers of America (DFA) will not be designated the stalking horse bidder. The court docket (#1175) is available on the case website. The judge presiding over the Dean Foods bankruptcy proceedings could hear a substantially different proposal when a scheduled hearing resumes today (March 19).
The bankruptcy hearing is being heard by Judge David Jones, in the U.S. Bankruptcy Court for the Southern District of Texas, Houston, Texas. An initial hearing to consider a motion designating Dairy Farmers of America (DFA) as the stalking horse bidder and establishing guidelines and the timetable for a bidding process on Dean assets was held on March 12, and was scheduled to continue March 19.
Read: DFA, Dean Foods reach initial $425 million ‘stalking horse’ agreement.
During the past week, however, attorneys and advisers for all parties involved worked to modify the original proposal, in part to address objections from creditors and potential buyers of Dean assets, including other dairy cooperatives.
Read: Dairy co-ops object to DFA, Dean Foods purchase agreement motion.
On March 18, a docket (1167) posted on the hearing website contained changes to the previous motion presented to the court.
In addition to withdrawing DFA as the stalking horse bidder, the proposal seeks to add additional transparency to the bidding process, laying out requirements related to making bid details public. The proposal also accelerates the proposed bidding and sale timeline to reflect a “shorter-than-anticipated liquidity runway.” Under the new proposed timeline, the deadline to submit bids is March 30 (moved up from April 13), with any objections filed by April 1 (up from April 22). A sale hearing would then be held April 3 (instead of April 27).
The proposal does grant the ad hoc committee, made up of representatives from about a dozen other dairy cooperatives, the right to request an extension on the proposed timeline.
The withdrawal of DFA as a stalking horse bidder did not signal withdrawal by DFA from the bidding process, the docket noted.
Progressive Dairy will continue to follow the proceedings and provide updates as they become available.
