Canton, Ohio-based LEL Operating Company, the parent company of Superior Dairy Inc., has submitted a $5.5 million bid on the now-shuttered Golden Guernsey Dairy Plant in Waukesha, according to company trustee Charlie Stanziale Jr.
Stanziale filed a motion in U.S. Bankruptcy Court on Friday asking for approval of a sale. He said LEL Operating Company is a stalking horse bidder and put down a $500,000 deposit on the plant.
“The buyer has 45 days from the day the court approves it to do his due diligence and decide whether he’s going to take it or not,” Stanziale said. “In the meantime, we’re taking other bids.”
He expects several other interested parties will come forward with bids, and there will be an auction in mid-May if that is the case.
None of the potential bidders are in the Waukesha area, he said.
Superior Dairy has customers in the Chicago area, which may be why the company is interested in Golden Guernsey, Stanziale said.
“I had to negotiate it up to that price because the previous offers were substantially lower,” he said. The property and equipment are worth about $5.5 million.
Golden Guernsey LLC abruptly filed for Chapter 7 bankruptcy in a Delaware court and closed the plant in January.
OpenGate Capital LLC, a Los Angeles-based private investment and acquisition firm, announced the closure of Golden Guernsey, which was one of its portfolio companies.
The closure of the dairy left more than 100 people out of work.
“There’s no guaratnee that (the new owner is) going to hire the same people that left, but presumably they would,” Stanziale said.
OpenGate Capital acquired Golden Guernsey in September 2011 from Dean Foods after the U.S. Department of Justice required Dean Foods to sell the business in order to resolve antitrust concerns that Dean Foods’ share of the school milk supply business was too large.
The owners attributed some of its financial problems to strict existing contracts when it purchased the business. Under bankruptcy law, the new owner would not have to abide by any of the old contracts for customers or the union, Stanziale said.
The plant at 2101 Delafield St. in Waukesha was built in 1955.