The self-described “ice cream of the future,” Dippin’ Dots Inc., has filed for Chapter 11 bankruptcy protection. For more than a year, the company has been fighting off foreclosure efforts from Regions Bank. However, the future of ice cream is having trouble staying afloat. Dippin’ Dots manufactures specialty ice cream products, which are primarily sold in venues like concert halls, theme parks, and stadiums, as well as at franchised locations.
According to court documents, at the time of their bankruptcy filing, the ice cream company owed approximately $11.1 million to the bank. Even though the company is struggling with their debts, this years revenues for the company sit at $27.7 million, which is an increase of a million dollars from last year. In the company’s bankruptcy petition, the company stated their assets are worth $20.2 million, but that their debts have risen to $12 million.
In an attempt to continue operations, Dippin’ Dots immediately asked the court to grant permission to spend some of the money that secures the Regions bank loan. Because the company “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” their attorney stated in court documents.
Dippin’ Dots released a statement stating that the bankruptcy filing is “the result of a failure to reach an agreement with its secured lender Regions [Bank], following several attempts to do so.” They also added that “this action represents the unfortunate conclusion of a 10-plus year productive relationship between Dippin’ Dots and Regions. Dippin’ Dots, Inc. does not anticipate that this situation will interrupt its ability to deliver supplies or service to any of its valued customers during this period. Under a plan of reorganization, Dippin Dots, Inc. will seek an equitable restructuring of debt that will allow the company to honor obligations to its vendors and other stakeholders.”
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