A company that had claimed to make the "Ice Cream of the Future" in 1988 has a very cold present due to their recent Chapter 11
bankruptcy filing, which is meant to allow them the use of cash collateral while their largest creditor forecloses on their existing loans.
Dippin' Dots, based in Paducah, Ky., owes $11.1 million to Regions Bank. On November 3 they asked U.S. Bankruptcy Judge T.H.F to let them use cash collateral so that they don't have to halt operations during their reorganization and the pending litigation.
Dippin' Dots claims that using cash collateral will not hurt any of their creditors, including Regions Bank.
The foreclosure case is pending in McCracken County Circuit Court. Regions Bank, based in Alabama, has claimed that Dippin' Dots defaulted on several of the loans they made to them.
The director of administration for Dippin' Dots, Steve Heisner, said that Regions Bank gave them 48 hours notice of their intention to foreclose on the multiple loans, and that move alone prompted the company to see bankruptcy protection.
While Heisner seeks to refinance Dippin' Dots' debt, he told the press, "We are hopeful and believe we will be successful. There is no thought, intent ... that our operations will be significantly different than they are today."
Additionally, attorneys for the company in court documents said that Dippin' Dots "has no alternative borrowing source and to remain in business, the (company) must be permitted to use the cash proceeds described herein to pay general operating overhead and administrative expenses."
The franchise end of the business, per Heisner, will not be affected by the bankruptcy - only manufacturing and sales will be. He said "The Dot, it's going to be there, there's no doubt about it."
Heisner stated that Dippin' Dots took a hit in 2008, when most businesses began to be affected by the downturn in the national economy. He offered, "It was just a difficult economic time, that's the only way I know how to express it."
Dippin' Dots are cryogenically frozen beads of ice cream that were created by Curt Jones, a microbiology graduate of Southern Illinois University. They are commonly sold nationwide in over 2,000 locations including stores, amusement parks, theater concession stands and in malls. Jones resumed control of the company in 2009 in an effort to restructure. He dismissed both the company president and vice president of operations upon his return.
The company listed approximately $20.2 million in assets and $12 million in liabilities in the filing. The listing also included income through September as $27.7 million, $26.7 million for 2010 and $33.8 million for 2009.
Neither the Dippin' Dots website or Facebook account has announced the bankruptcy.
If you are headed to a business or personal bankruptcy,contact a bankruptcy attorney from our directory to assist you in the filing. The proper representation can help you in protecting your assets and your business!