LOS ANGELES -- OpenGate Capital, LLC, a private investment and acquisition firm, announced Tuesday, January 8th Golden Guernsey has filed for Chapter 7 bankruptcy in Delaware bankruptcy court. This action follows the closing of Golden Guernsey’s Waukesha plant on January 5th.
OpenGate Capital acquired Golden Guernsey in September 2011 from Dean Foods after the United States Department of Justice required Dean Foods to sell the business in order to resolve antitrust concerns. The acquisition terms included an exclusive and fixed-price milk supply agreement, and the assumption of a legacy union contract.
During the investment period, OpenGate Capital and its management team successfully implemented new sales and operations strategies which created a seamless transition of Golden Guernsey from the former owner’s organization and yielded an increase in sales of 20%.
However, as Golden Guernsey was suffering under the pressure to meet demands for lower cost products, it was unable to successfully reduce its expenses in a way to achieve a state of financial viability given some of its legacy relationships.
Since being acquired by OpenGate Capital, Golden Guernsey made vigorous efforts to reduce its expenses through discussions with its various suppliers, vendors, and the labor union. The prospect of closing the plant and the potential for bankruptcy was raised on several occasions with these groups, all of which were provided with a clear picture of Golden Guernsey’s fragile financial condition. Despite this, Golden Guernsey’s efforts were rejected, leading to the closure of the business.
"This was a very difficult decision given the loss of jobs and disruption to milk delivery service, yet it had to be made. The closure of the plant is not a reflection of the hard work contributed by the Golden Guernsey family of employees," OpenGate Capital's CEO Andrew Nikou said.