Valuation Analysis Helps Resolve Product Liability Claims without Bankruptcy

Plainview Milk Products

Plainview, Minnesota

Challenge

$25 million co-op owned by local dairy farmers. $2 million of debt.


  • Company had major product recall (no injury to consumers)
  • Company faced 5 lawsuits filed in different jurisdictions around the country. Lawsuits had face value of $30 million.
  • Like most co-ops, Plainview had no significant assets to pay claims and was only valuable as a going concern to its dairy farmer owners
  • Product liability insurance totaled $5 million

Solution

  • Company counsel suggested to one of the 5 judges handling the litigation that this overall case would be better handled via mediation and judge agreed.
  • Company hired MorrisAnderson to provide court and litigants with an objective analysis of what the Company could economically contribute to settlement.
  • Judge convinced other 4 judges and all litigants to informally stay of all litigation to attempt a mediation.
  • MorrisAnderson presented its analysis in court to judge and all parties.

Results

  • Case settled with Company contributing $2 million over time and the majority of insurance coverage turned over to claimants.
  • Claimants received approximately 50% of their valid claims in cash within 2 years.
  • Company survived and continues to do well.

Daniel F. Dooley

Dan Dooley, CTP, is a Principal and CEO at MorrisAnderson based out of Chicago. He has a strong national reputation in crisis management, operations improvement, debt refinancing/restructuring and C-level positions. He is a frequent speaker at industry conferences and a regular author for industry periodicals. Dan has served on the Board of Directors of both… Read More