Knudsen, the largest dairy in the West until it sought protection from its creditors under federal bankruptcy laws in September, is selling its Phoenix milk plant and is working on deals to sell plants in five other states, the firm's creditors were told Monday.
Knudsen agreed to sell the Phoenix plant to Dillon Cos., a unit of Cincinnati-based Kroger Co., for $4.7 million, Knudsen Chief Executive John P. Brincko said at a meeting of unsecured creditors. The Los Angeles-based dairy has also received two bids for its Hawaiian milk plant and expects to sign a sale agreement next week, Brincko said. The sale must be approved by the bankruptcy court.
Knudsen, known to generations of Californians for its cottage cheese, milk and yogurt, has already sold most of its California operations to Kraft Inc. and Hughes Markets for $68 million but continues to operate plants in other states.
All Debts May Not Be Paid
Knudsen lawyer Stephen P. Feldman acknowledged that there may not be enough money left after the sales to fully pay the unsecured creditors. "I don't believe the asset values left to be disposed of will pay all the debts," he said.