With the economy in crisis, it seems that companies continue to struggle financially. We’ve seen a string of bankruptcies for companies both large and small. With the economy continuing to suffer, we’ve unfortunately dug ourselves into a vicious cycle; many American families are struggling to survive. In turn, they begin hoarding their discretionary incomes that they once used to stimulate the economy. Then with companies struggling to make sales, their numbers eventually force them into financial strife.
Dippin’ Dots, the company responsible for making colorful beads of ice cream, known as the “ice cream of the future” has filed Chapter 11 bankruptcy in Kentucky, to avoid foreclosure. The company endured a few financial setbacks in the past four years, which has culminated in their inability to pay back their one of their primary lenders.
Dippin’ Dots is a 170-worker company that has about 142 retail locations, mostly franchised. They have additional agreements with over 9,900 small vendors, like the ones you find at fairs, baseball games and other events. Dippin’ Dots cannot be sold in grocery stores because the little beads will melt in anything warmer than -40 degrees Fahrenheit!
Dippin’ Dots battle began four years ago, at the peak of the economic crisis, when Dippin’ Dots fell behind on their loan with Regions Financial Corp. The lack of profits wasn’t Dippin’ Dots only problem, as they were finishing up another losing battle over patents, which became a very expensive legal ordeal.
The company tried it’s best to work with its lender, and even offered several options for paying back part of their loan. Their lender was unfortunately not willing to work with Dippin’ Dots and posted a foreclosure notice to the company just this past week. The company is looking at about $12 million in liabilities and $20.2 million in assets. Some of these assets, however, cannot be used to pay down the loan, as the company has over $3 million worth of inventory, and owns a 120,000 square foot plant.
Dippin’ Dots is hopeful for their future, as their sales are beginning to pick up. The company has also stated adamantly, that they will remain in business despite the bankruptcy. Dippin’ Dots may seem like a fairly new company, but it was actually started in 1988 by a microbiologist who created the idea of flash freezing the ice cream with liquid nitrogen, giving it its distinctive bead shape we’ve come to know and love. For more bankruptcy facts and news, click here.