I work in one of the plants that was put up for collateral for a line of credit. Still looking through the online paperwork so I may have missed something or haven't found it yet. Would I be correct in saying if Dean's used that credit line and then went into bankruptcy without paying any of it back, the banks now own those plants? If so then the 16 plants wouldn't fall under the bankruptcy court?
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The ch 11 grants automatic stay on any attempts of creditors with a secured interest in real property from seeking foreclosure. All of the 42 Dean Foods entities have collectively filed for chapter 11 reorganization.
None of the plants or business units are exempt.
List of plants that were put up for collateral for loan before Chapter 11 filing doesn't matter any more. Bankruptcy filing basically throws everything into the collateral pool. Whatever can be sold, will be sold. Just a matter of everyone owned money trying to get the most money out of the sales.
What are the list of plants put up for collateral?
Purpose of Chapter 11 is reorganization- Company pays off debt for a % of what was owned and comes up with a plan to continue operations. That's the intent of the law. That's not what happened here or what happens in real life with most Chapter 11 filings. This was Chapter 11 instead of Chapter 7 because the Dean Foods big wigs thought they would be able to sell everything to DFA shortly after filing (kick backs surely involved in the form of promised jobs or bonuses). Chapter 11 gives them some say in what's being done (have to get court approval, but they can present plans to the court for approval), where Chapter 7 doesn't- in Chapter 7 everything goes up for bid and is sold to the highest bidder. Some things might get sold while Company is still in Chapter 11, but it's Just a matter of time before this converts to Chapter 7 and everything not already sold gets sold in a fire sale.
Let me add that I don't think the plants are in the clear. I'm sure the banks have buyers lined up. If anything our fate will happen faster.