Under the Cooperative Creditors Arrangement Act, which is part of Canada’s bankruptcy provisions, a company can prevent its creditors from foreclosing on debts while it seeks ways to survive.
The company issued a news release saying it’s trying hard to keep the business going for the benefit of its cooperative members who supply 70 per cent of its milk.
Eight organic grain farmers in the Durham area began Organic Meadow 25 years ago as a cheese manufacturing business and then added fluid milk.
Last year it was included as one of the best 100 food and beverage processors picked by Food in Canada magazine.
Despite a North-America-wide shortage of organic milk, the co-operative has been in financial crisis for a long time.
Among its major creditors is the Dairy Farmers of Ontario marketing board which, under the rules of this receivership, must continue to supply the Guelph-area plant with milk.
Michelle Schmidt, spokesman for Organic Meadow, said in an e-mail today that “our goal is to work with the milk marketing board and all of our creditors to put a restructuring plan in place that allows us to emerge from this process stronger, and which allows us to continue growing the organic milk market we started in 1989.
“We are reassuring all of our customers, employees, suppliers and consumers who have come to love and trust Organic Meadow products that we will be operating business-as-usual during this restructuring process.”