Dippin' Dots: They're the little micro beaded ice cream orbs that so many of us know and love from malls, amusement parks and sports arenas. And while the company has been in business since 1988, it seems that the frozen treat company -- Dippin' Dots Inc. -- has run into its own financial struggles. Last week the company filed for Chapter 11 bankruptcy.
However, even though the company did file for bankruptcy, a spokesman for Dippin' Dots Inc. said that this is not a signal of the end, and that the company will remain in business through this Chapter 11, and afterwards.
In general, a Chapter 11 gives businesses the chance to create a payment plan to reorganize debt. Typically, the goal is to reduce the amount that a business owes in debts to more closely match the value of the company's assets.
According to sources, Dippin' Dots ran into financial difficulties after failing to reach an agreement with the secured lender Regions Financial. In fact, according to the bankruptcy filing, the company owes Regions Financial approximately $10 million.
But Regions Financial is also not the only company to be owed money. In fact, Dippin' Dots owes the Peoples Bank another $657,000.
In terms of assets, according to the filing, Dippin' Dots has $20.2 million, with more than $3 million of that in ice cream dot inventory.
Looking to the future, a repayment plan will most likely be created and presented to creditors in bankruptcy court. If the plan is accepted, it will become a contractual agreement between Dippin' Dots and those who are owed money.
Source: CNN Money, "Dippin' Dots files for bankruptcy," Jason Kessler, Nov. 4, 2011