Fernbridge, Calif.-based Humboldt Creamery, LLC filed for bankruptcy on Tuesday, following months of speculation about financial difficulties and the resignation of CEO Richard Ghlarducci.
The company filed for Chapter 11 bankruptcy protection in a Santa Rosa court as it reorganizes and seeks a buyer. In late February, Ghilarducci, who had been CEO since 1997, stepped down suddenly and warned of “possibly irregularities in the books” according to a March 22 New York Times article.
“The Board of Directors was shocked at the news contained in the telephone call from our former CEO’s personal lawyer,” said Jim Renner, Chairman of Humboldt Creamery Board, in a release. “We immediately began an independent inquiry, which will be managed by an outstanding team of outside lawyers, accountants and other advisers. We are determined to get to the bottom of this matter as quickly as possible and to act in the best interests of our cooperative members, employees, and business partners.”
Founded in 1929 and currently comprised of about 50 California dairies, Humboldt is the largest independent dairy cooperative in California, specializing in organic milk, ice cream and milk powders from pasture-raised cows. Its products are sold nationally and internationally.
According to court documents, unsecured creditors include California Dairies, with a $1.25 million claim, Rumiano Cheese Company, with a $1.18 million claim, and Organic Valley, with a $544,000 claim.
Humboldt’s interim CEO, Len Mayer, said in a statement that the company has negotiated a $3 million loan agreement with CoBank and American AgCredit. The funds will be used to pay suppliers for goods, supplies and services delivered after the bankruptcy filing, to support daily operations and to seek a “strategic buyer.”