Parmalat USA unit agrees to work with creditors to develop reorganization plan

By Jeff Pines

Washington, May 14 - Parmalat USA's Farmland Dairies LLC unit said it will work with its creditors to develop a reorganization plan and restructure its business.

Farmland and Parmalat USA filed for bankruptcy on Feb. 24 with the U.S. Bankruptcy Court for the Southern District of New York after their Italian parent filed for bankruptcy last year. Since then, management has thoroughly reviewed the company's operations, and decided that reorganizing the company was a better idea than selling it, the company said.

It plans to modify is debtor-in-possession financing to removing any asset sale deadlines.

"While Farmland's original DIP financing package continues to provide the liquidity necessary for operations in the shorter term, the company is now in a position to be able to work with post-petition lenders and other creditors to secure longer-term financing that, when in place, would allow Farmland to develop and implement a standalone- restructuring plan around the company's core businesses," said Jim Mesterharm, principal at AlixPartners, in a press release.

Assets of Parmalat USA and Farmland will be included in the plan.

Farmland said it also is looking for a new chief executive officer.

Parmalat USA's Chapter 11 case number is 04-11139.

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