MorrisAnderson Chapter 11 Liquidation Turned into Successful Plan of Reorganization


Wallingford, New Jersey


$400 million milk producer in NY/NJ – subsidiary of Parmalat S.P.A.. $100 million loan to Parmalat USA, with funds upstreamed to parent. Company filed for bankruptcy following parent’s bankruptcy filing.

  • Milk producer went into bankruptcy along with its European parent.
  • Bank risked losing a significant portion of $100 million senior stake due to strong opposition from other lenders who preferred liquidation to an equity stake.
  • MorrisAnderson’sanalysis uncovered various errors in company’s forward looking assumptions that would significantly impact and undermine Bank’s position.
  • Potential fraudulent conveyance allegations by UCC could impact Bank’s payout significantly to below that of unsecured creditors.


  • Company sold or closed all non-core assets.
  • New management team renegotiated contracts with major supermarkets.
  • Settlement negotiations with UCC resulted in fraudulent conveyance allegations dropped, preserving senior position for Bank and with higher payout to unsecured creditors.
  • Other senior lenders bought into the reorganization plan instead of liquidation.


  • Company emerged from bankruptcy and is performing better than plan.
  • Bank likely was repaid their investment.