Major dairy processor Dean Foods announced on Tuesday that is has entered Chapter 11 reorganization to shore up its business.
The company also said it is in "advanced discussions" about selling substantially all of its assets to Dairy Farmers of America.
In the meantime, Dallas-based Dean has received $850 million from existing lenders, led by Rabobank.
Dean intends to continue normal business operations and pay farmers in full, but suggested that suppliers wait a few days to process outstanding checks because company accounts may be temporarily frozen.
Dean — whose brands include DairyPure, TruMoo, Garelick Farms, Swiss Premium and Lehigh Valley Dairy Farms — has cut farms and closed plants during the multiyear downturn in the dairy economy.