Sunday, 6 November 2011

Dippin Dots Files for Chapter 11 Bankruptcy Protection

The ice cream maker, Dippin’ Dots Inc. in its struggle to survive and avoid foreclosure filed for Chapter 11 bankruptcy protection on Thursday in U.S. Bankruptcy Court in Paducah, Ky. Dippin’ Dots manufactures quirky and colorful ice cream beads using liquid nitrogen and describes its products as the “ice cream of the future.”

Dippin’ Dots has been in a four-year battle with its biggest lender, Regions Financial Corp., which has moved to foreclosure on the loan this week. The company faced technical default four years ago when the economic crisis was at its peak and when customers watched every dollar they spent.

With about 140 Dippin’ Dots retail locations and 9.952 retail vendors, it faced sales problems when its expensive legal battle was lost over the validity of filing patents that protect its special freezing process. Steve Heisner, the company’s director of administration, customer service and information systems said that “All of that hit us at the same time.”

Although the company made several proposals to Regions for paying a part of the loan, the bank did not agree and posted a foreclosure notice on Tuesday. Its assets are valued at $20.2 million and it owns a 120,000 square-foot plant in Kentucky that is capable of producing 25,000 gallons of frozen dots a day. The company said that its sales are recovering and that its revenue is $27.7 million, above last year’s $26.7 million.

Read More : Dippin Dots Files for Chapter 11 Bankruptcy Protection

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