May 11, 2012
By: John Clark
Dippin’ Dots Inc., which filed for bankruptcy last year in a successful effort to stave off foreclosure, may be purchased by a newly formed company, Dippin’ Dots LLC, which was created a few weeks ago by investors from Oklahoma, according to a report from the Detroit Free Press.
The newly formed company will reportedly ask the U.S. Bankruptcy Court in Louisville, Kentucky this week for permission to buy the struggling ice cream company, which filed for Chapter 11 bankruptcy protection in late 2011.
Dippin’ Dots Inc., which is based in Paducah, Kentucky, filed for bankruptcy in order to prevent Regions Bank from foreclosing on its only plant, which produces 1.5 million gallons of the company’s signature ice cream product each year.
Sources say that the bank was unwilling to refinance $12 million in loans that Dippin’ Dots was unable to repay. In its filing, the company said it had debts of more than $13 million, but it also had assets of $20 million, giving it some hope for future financial recovery.
The company’s founder, Curt Jones, blames the prolonged recession and a lengthy battle in court aimed at protecting his product’s patent for sinking the company’s finances.
Jones, a former microbiologist invented a flash-freezing process in 1987 that allowed him to create the unique shape and texture of his pebble-sized ice cream. His attempts to protect his patent, however, were ultimately unsuccessful.
This February, Jones received more bad news when the bankruptcy court dismissed him from his role as head of the company and appointed an outside restructuring officer to run the company until a buyer could be found.
Fortunately for Jones, there is a willing buyer waiting in the wings, and Jones has expressed a great deal of optimism about the future of his popular ice cream. According to Jones, the company plans “to keep making Dippin’ Dots, so nobody needs to worry.”
In addition, Jones predicts that most of the 165 employees at the company’s plant in Paducah will keep their jobs.
Dippin’ Dots only has about 20 stores nationwide, but the product is sold at thousands of different outlets across the country, including shopping walls, sporting games, and special events.
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