DFA Calls Dean Foods Estate Claims “Farfetched”
December 3, 2020
This week nearly 500 dairy farmers who used to ship milk to Dean Foods are being forced to deal with the company’s estate threatening legal action against them. Dairy Farmers of America, who once was the largest supplier of milk to the company, and then purchased the majority of the company’s assets, says they are frustrated that farmers are having to face this issue.
“While we had no advance knowledge and would not have contemplated such a disappointing action, we are aware that the Dean Foods Estate is threatening legal actions against certain milk suppliers unless they agree to repay a portion of the payments received in the ordinary course of business and on regular payment dates prior to the Dean Foods bankruptcy filing,” DFA officials wrote in a statement. “We find it extremely disappointing that hardworking dairy farm families are now put in the position of having to incur costs, either in paying the amounts demanded, or obtaining legal counsel to defend themselves against these farfetched claims.”
DFA, who did not receive a Trustee Avoidance Claim letter because of a broad release of claims against each other included in their asset purchase agreement, says there is no legal basis to stop the Dean Foods Estate from pursing what they call “frivolous” claims.
“It’s egregious to attempt this claw back of funds from the very dairy farmer families that supplied milk in good faith and trust,” they said. “We have no connection to the Dean Foods Estate and are disheartened by its actions.”
It’s important to note that farmers weren’t the only people Dean Foods did business with who received these settlement letters. This is a normal part of bankruptcy, but one source told us the dairy industry has no precedent to rely on for this kind of widespread, farmer level scenario.