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Dean’s Colorado plant to close, on DFA list

Progressive Dairy Editor Dave Natzke Published on 20 February 2020

One of 44 Dean Foods’ plants on a list of facilities to be sold to Dairy Farmers of America (DFA) could be closed before the bankruptcy transaction is completed.

On Feb. 17, Dean notified the Colorado Department of Labor and Employment that the Meadow Gold Dairy plant in Greeley, Colorado, would begin layoffs in March and close in April. The Worker Adjustment and Retraining Notification (WARN) Act requires employers to give a 60-day notice when planning to lay off substantial numbers of workers.

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The WARN notice indicates 82 jobs will be affected by the closure. Layoffs are expected to begin on March 13, with the entire plant closing during a 14-day period between April 10-24.

According to documents shared with Progressive Dairy, the plant was shut down following an Interstate Milk Shippers (IMS) inspection during the week of Feb. 10. A letter from Dean to the Colorado Department of Labor and Employment and Greeley’s mayor, John Gates, said the company “will be required to incur substantial costs to comply with the IMS findings and wastewater treatment upgrades, at a time when funding is limited due to our Chapter 11 proceedings.”

“Due to both unforeseeable business circumstances and the impending sale of this property through Chapter 11, the entire plant will be closed,” the letter said.

The Greeley plant is one of 44 listed on an “asset purchase agreement” with DFA, also announced on Feb. 17. A second Colorado plant, in Englewood, is also on the list. Under the agreement, DFA becomes the “stalking horse bidder” to acquire a substantial portion of Dean’s assets and business for a base purchase price of $425 million.

Read: DFA, Dean Foods reach initial $425 million ‘stalking horse’ agreement.

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The two parties have been working to reach an agreement since DFA became aware of Dean’s plan to initiate voluntary Chapter 11 reorganization proceedings. Dallas-based Dean announced the filing on Nov. 12, 2019, in the U.S. District and Bankruptcy Court in the Southern District of Texas. Any transaction must be approved by the bankruptcy court and the U.S. Department of Justice.

Despite the closure announcement, DFA remains interested in the Greeley facility and real estate, and is evaluating it “for opportunities to repurpose operations,” according to Monica Massey, DFA’s executive vice president and chief of staff.  end mark

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