Humboldt Creamery has filed for bankruptcy protection just two months after former CEO Rich Ghilarducci scandalized the company by revealing its finances weren’t as sweet as they seemed.
The bankruptcy will make it possible for the creamery to keep operating, but it could also tear it from the hands of its member farmers. The company’s $50 million to $100 million debt, combined with the inaccurate financials, prompted the Tuesday morning Chapter 11 filing in U.S. Bankruptcy Court in Santa Rosa.
Humboldt Creamery is looking to get loans to allow it to run through the busy summer months producing ice cream — while looking to sell or reorganize the business. The company’s members say they are working on a plan to buy the company, but they may not be the only prospective buyers.
The creamery is also asking the court for permission to pay farmers a chunk of money to keep them afloat, even though its debt to them was generated prior to the bankruptcy filing. If the creamery can’t pay, its attorneys argue, it would have to cease operations immediately and begin liquidating assets.
Interim CEO Len Mayer said that the creamery association’s board met and approved the decision to file for bankruptcy Friday after the company was unable to reach a deal with its bank, CoBank. The bank needed additional security, Mayer said.
The best outcome is for Humboldt Creamery to emerge from bankruptcy still owned in part by its approximately 50 farming members, who currently own 75 percent, Mayer said. Longtime board member Dennis Leonardi said the creamery’s members are optimistic they can do just that.
”The optimism comes in trying to put together a company that can buy us back out of bankruptcy,” Leonardi said. “That’s putting together financing as a cooperative and basically putting together a company that works — the company that we thought we had.”
The remaining 25 percent of the company is held by Dairy Farmers of America. Should it not be possible for the creamery’s current members to buy it back, Mayer said the hope is that a reputable dairy company is able to take the reins of the company.
In an emergency filing Tuesday, the company said it needs $3 million in financing to carry it through summer, when ice cream production doubles to 250,000 to 270,000 gallons a week. Some $1.75 million is needed immediately, its attorneys argued, to pay farmers for milk produced in the past 20 days.
Without that quick payment, farms could go under, the creamery wrote, and the business could not be sold as a going concern, which would devastate customers, suppliers, truckers and others.
In a declaration supporting the financing, Leonardi said that he’s owed $238,000 — $70,000 of which is for milk delivered this month. Without payment for the milk, the creamery’s farmers face default to lenders, bankruptcy and liquidation, he said, especially since costs tend to rise at this time of year.
”We are small family farmers that have been tending the land and dairying for generations. We don’t have massive reserves to weather this massive economic storm and there is no bailout or stimulus money, just sweat equity lost,” Leonardi said in the filing.
Humboldt Creamery’s top four creditors are owed $3.6 million, claims which will have to be handled as part of the bankruptcy process. Ghilarducci, the creamery’s fifth largest creditor, is owed $370,000 — an amount which is understandably disputed.
A Humboldt Creamery report alleging that Ghilarducci manipulated financial data has been forwarded to the federal Securities and Exchange Commission, the U.S. Justice Department and the FBI, Mayer said previously, adding that the agencies are now looking into the matter.
Rumiano Cheese, headquartered out of Willows, is the second largest creditor and is owed nearly $1.2 million. Owner Baird Rumiano said he doubts he’ll recover much from the bankruptcy process. Rumiano said he’ll keep buying milk from the creamery, but he won’t let it rack up any more debt. Rumiano said he was astounded by the sudden change of fortune for the company.
Generally, claims before bankruptcy are treated by the court as separate from those arising after the filing. Ongoing payments are made, but so-called pre-petition claims are paid at the end of the process.
18 Comments on “Humboldt Creamery Files for Bankruptcy Protection”
Dear Humboldt Creamery Co. I’m a customer of Safeway stores in kitsap county Washington state. I was sad to learn that Safeway no longer carried your Humboldt Creamery SuperTreats Pineapple/strawberry or cherry (dont’ remember exact flavors) Popsicles If you could e-mail so I know what other stores in the area Bremerton/Silverdale/Port / Orchard Washington, me my family and friends will do are part to help your company’s financial situation. WE have very much enjoyed your products for years and sincerely wish you all the good luck in the world in retuning your company back the stable company it’s been in the past. Thank you.
Dear Humboldt Creamery Co. I’m a customer of Safeway stores in kitsap county Washington state. I was sad to learn that Safeway no longer carried your Humboldt Creamery SuperTreats Pineapple/strawberry or cherry (dont’ remember exact flavors) Popsicles If you could e-mail so I know what other stores in the area Bremerton/Silverdale/Port / Orchard Washington, me my family and friends will do are part to help your company’s financial situation. WE have very much enjoyed your products for years and sincerely wish you all the good luck in the world in retuning your company back the stable company it’s been in the past. Thank you.
Dear Humboldt Creamery Co. I’m a customer of Safeway stores in kitsap county Washington state. I was sad to learn that Safeway no longer carried your Humboldt Creamery SuperTreats Pineapple/strawberry or cherry (dont’ remember exact flavors) Popsicles If you could e-mail so I know what other stores in the area Bremerton/Silverdale/Port / Orchard Washington, me my family and friends will do are part to help your company’s financial situation. WE have very much enjoyed your products for years and sincerely wish you all the good luck in the world in retuning your company back the stable company it’s been in the past. Thank you.
Dear Larry:
Due to the Chapter 11 filing HC was forced to close it’s novelty manufacturing plant in Los Angeles. HC no longer manufactures the products you seek. Once they are gone from the market they’ll not be avaialbe again – unless another company purchases the facility and restarts the supply chain.
HC CS
Dear Larry:
Due to the Chapter 11 filing HC was forced to close it’s novelty manufacturing plant in Los Angeles. HC no longer manufactures the products you seek. Once they are gone from the market they’ll not be avaialbe again – unless another company purchases the facility and restarts the supply chain.
HC CS
Dear Larry:
Due to the Chapter 11 filing HC was forced to close it’s novelty manufacturing plant in Los Angeles. HC no longer manufactures the products you seek. Once they are gone from the market they’ll not be avaialbe again – unless another company purchases the facility and restarts the supply chain.
HC CS
Larry,
I’ve been searching our local stores for the Humboldt Creamery SuperTreats in hopes of finding a box or two that we could share while swapping lies about our racing days. email me at sprintcarz@earthlink.net or look me up at http://www.nwraceplace.com user name is sprintcarz.
I’ll keep looking!
Larry,
I’ve been searching our local stores for the Humboldt Creamery SuperTreats in hopes of finding a box or two that we could share while swapping lies about our racing days. email me at sprintcarz@earthlink.net or look me up at http://www.nwraceplace.com user name is sprintcarz.
I’ll keep looking!
Larry,
I’ve been searching our local stores for the Humboldt Creamery SuperTreats in hopes of finding a box or two that we could share while swapping lies about our racing days. email me at sprintcarz@earthlink.net or look me up at http://www.nwraceplace.com user name is sprintcarz.
I’ll keep looking!
This is a most disappointing revelation. Seems like I’m out of the loop. I moved from WA to FL over 4 years ago and still miss my Supertreats. Unlike a popcicle that melts, they would get all mushy. I used to microwave them a little to soften them up. R.I.P. Supertreat, you will truly be missed.
This is a most disappointing revelation. Seems like I’m out of the loop. I moved from WA to FL over 4 years ago and still miss my Supertreats. Unlike a popcicle that melts, they would get all mushy. I used to microwave them a little to soften them up. R.I.P. Supertreat, you will truly be missed.
This is a most disappointing revelation. Seems like I’m out of the loop. I moved from WA to FL over 4 years ago and still miss my Supertreats. Unlike a popcicle that melts, they would get all mushy. I used to microwave them a little to soften them up. R.I.P. Supertreat, you will truly be missed.
PROVIDENCE!
After moving to Florida as mentioned in last years post, I had all but given up on supertreats with the exception of the occasional visit to WA until I was devastated by the news that they were no longer being made.
Through an act of deliverance I am here to report that I have been delivered.
Budget $aver brand has started producing them or a close facsimile labeled as:
Monster Pops
12 per bag
2 Flavors:
“slushed” Lemon Lime
“slushed” Cherry-Pineapple
The cherry-pineapple is the same shape, same color swirl and same if not very close flavor.
Been a welcome surprise for fighting the Florida heat.
Buy U Some!
For a fee I will overnight some on dry ice haha.
PROVIDENCE!
After moving to Florida as mentioned in last years post, I had all but given up on supertreats with the exception of the occasional visit to WA until I was devastated by the news that they were no longer being made.
Through an act of deliverance I am here to report that I have been delivered.
Budget $aver brand has started producing them or a close facsimile labeled as:
Monster Pops
12 per bag
2 Flavors:
“slushed” Lemon Lime
“slushed” Cherry-Pineapple
The cherry-pineapple is the same shape, same color swirl and same if not very close flavor.
Been a welcome surprise for fighting the Florida heat.
Buy U Some!
For a fee I will overnight some on dry ice haha.
PROVIDENCE!
After moving to Florida as mentioned in last years post, I had all but given up on supertreats with the exception of the occasional visit to WA until I was devastated by the news that they were no longer being made.
Through an act of deliverance I am here to report that I have been delivered.
Budget $aver brand has started producing them or a close facsimile labeled as:
Monster Pops
12 per bag
2 Flavors:
“slushed” Lemon Lime
“slushed” Cherry-Pineapple
The cherry-pineapple is the same shape, same color swirl and same if not very close flavor.
Been a welcome surprise for fighting the Florida heat.
Buy U Some!
For a fee I will overnight some on dry ice haha.
OMG! They have Cherry-Mango!
I found them at Winn Dixie grocer and Wal-Mart.
Their website claims they distribute to all 50 states.
Their store locater page came up blank on my iphone so you’ll have to check it out.
OMG! They have Cherry-Mango!
I found them at Winn Dixie grocer and Wal-Mart.
Their website claims they distribute to all 50 states.
Their store locater page came up blank on my iphone so you’ll have to check it out.
OMG! They have Cherry-Mango!
I found them at Winn Dixie grocer and Wal-Mart.
Their website claims they distribute to all 50 states.
Their store locater page came up blank on my iphone so you’ll have to check it out.