LOUISVILLE, Ky. (AP) — Once the self-proclaimed "Ice Cream of the Future," Dippin' Dots is seeking federal bankruptcy protection, a move the company said is aimed at staving off foreclosure on more than $11 million in loans.
The Paducah, Ky.-based company filed for Chapter 11 reorganization Thursday night, asking U.S. Bankruptcy Judge Thomas H. Fulton to allow it to use cash collateral to continue operations while the case plays out. The company said in a filing that allowing it to use the cash collateral and stay functioning will not harm creditors, including its largest single creditor, Regions Bank, which is owed $11.1 million.
Alabama-based Regions Bank sued Dippin' Dots in February, alleging the company defaulted on multiple loans. The suit is pending in McCracken County Circuit Court.
Steve Heisner, director of administration for Dippin' Dots, said Regions gave the company 48-hours' notice that it intended to foreclose on the loans. That move forced Dippin' Dots Inc., to file for bankruptcy while looking to refinance the debt, Heisner said.
"We are hopeful and believe we will be successful," Heisner told The Associated Press. "There is no thought, intent ... that our operations will be significantly different than they are today."
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," its attorneys said in court documents.
