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South Carolina Chapter 7: Dairy files for protection

For many South Carolina business owners, financial troubles signal the beginning of necessary decisions concerning the fate of their company. Bankruptcy can be a responsible solution for owners currently experiencing financial troubles in their business dealings. The decision to file for Chapter 7 has finally come for the Golden Guernsey Dairy in another state. The company abruptly closed its doors recently, and a bankruptcy process will soon begin the process of overseeing the liquidation of the company's assets. The Chapter 7 filing reveals the dairy has over 200 creditors and liabilities up to $50 million.

The company is also under fire by its workers after reportedly closing its doors with no notice to employees. One of the workers complained about the closure and stated the plant had violated state law by not providing advance notice of the impending closure. Over 100 employees of the plant have been affected by the bankruptcy.

The Wisconsin dairy was previously sold to OpenGate Capital after antitrust concerns about its share of supplying milk to local schools were leveled against the parent company, Dean Foods. Once OpenGate acquired the dairy, the company made changes that reportedly boosted sales. However, costs could not be reduced enough for the company to stay 'financially viable.' Although the dairy had also made a concerted effort to reduce its operating costs, its financial state ultimately led to the decision to file for bankruptcy protection.

Expenses of the dairy are said to have been more than the revenue it was bringing in. Due to this, the company could no longer operate efficiently. Chapter 7 is often an alternative examined when the financial state of a business becomes a growing concern. Bankruptcy can be a positive solution for companies experiencing financial difficulties because it gives the owners the opportunity to confront the financial obligations in a responsible manner. South Carolina business owners in a similar situation may want to examine the best approach to resolve financial issues that have become unmanageable.

Source: The Business Journal, "Golden Guernsey Dairy files Ch. 7 bankruptcy," Jeff Engel, Jan. 9, 2013

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