Tuesday, May 21, 2024

97-year-old Illinois dairy forced into bankruptcy

A 97-year-old family-owned dairy that offers home milk delivery in glass bottles and operates over 40 ice cream and dairy stores in Illinois and Missouri recently filed for Chapter 11 bankruptcy protection.

Oberweis Dairy Inc., headquartered in North Aurora, Illinois, filed its petition Friday in the U.S. Bankruptcy Court for the Northern District of Illinois. 

In its filing, which seeks to reorganize and restructure the company, Oberweis Dairy lists both its assets and liabilities as between $10 million and $50 million and states it has up to 5,000 creditors. The company states that funds will be available for distribution to unsecured creditors.

Oberweis owes more than $4 million to the company’s top 20 unsecured creditors, including Nussbaum Transportation of Hudson, Illinois, owed more than $774,000; Greco & Sons, of Barlett, Illinois, owed nearly $722,000; and Penske Truck Leasing of Earth City, Missouri, owed more than $132,000. According to the petition, Oberweis Dairy also owes more than $173,000 to the Cook County treasurer’s office in Chicago.

Oberweis Dairy has been operating since 1927 when Peter J. Oberweis, a dairy farmer in Aurora, began selling extra milk to his neighbors from the back of his horse-drawn wagon, according to the company’s website.

The fourth-generation company is owned by the family of former Illinois state Sen. Jim Oberweis, who bought the company in 1986 and has served as chairman of Oberweis Dairy for 37 years.

Oberweis has been a fixture in Illinois politics. He served in the legislature from 2013 to 2021 and ran for the U.S. Senate in 2002 and 2004 and for governor in 2006. He lost in the Republican primary all three times. He also ran for Congress in 2008 but lost to Democrat Bill Foster. Oberweis again ran for election to the U.S. House for Illinois’ 14th Congressional District but lost in the general election in 2020, according to CBS News.

The petition lists Adam Kraber as president of the company. As of publication time Monday, Oberweis Dairy’s bankruptcy attorney, Howard L. Adelman, had not responded to FreightWaves’ request for comment.

The reason for the dairy’s bankruptcy was not immediately clear. Oberweis Dairy and traditional dairy products are facing growing financial challenges because of the rise of plant-based milks, such as almond, soy and oat milk, which have captured a growing market share, according to an article by news outlet Archyde.

According to Pitchbook, Oberweis received a $90,000 grant from the U.S. Department of Agriculture in December 2022. In April 2020, the company received a $5.67 million loan from CIBC Bank of Chicago through the U.S. Small Business Administration’s Paycheck Protection Program.

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