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June 17, 2009

Vermont Milk Company Weighing Bankruptcy

ICE-CREAM-403Plenty of fresh rumors floating around this week about the demise of the Vermont Milk Company, the dairy processor founded by a group of farmers and longtime activist Anthony Pollina.

Pollina and one of the founding board members say it's unclear whether the company will have to file for Chapter 11 bankruptcy, but a decision looms.

"We are considering all the options at this point," said Chantale Nadeau, a farmer from the Northeast Kingdom town of Holland. "This is another blow to dairy farmers when we are already suffering."

Nadeau said the company will weigh its options in the coming weeks.

Pollina said the farmers and individuals who have kept the company afloat since 2006 should be commended, and its mission would continue — even if it had to file for Chapter 11. Unlike filing for Chapter 7, which is liquidation, filing for Chapter 11 would allow the company to reorganize and potentially work out deals with its various creditors to help keep it alive.

"VMC is a pretty courageous effort by farmers and others to establish a different model of doing dairy business. Everyone involved deserves appreciation ... and I imagine the efforts will continue even if it means reorganization," said Pollina in an email to Seven Days.

 Pollina added that plenty of Vermont companies are reeling from the recession, not just dairy farms and processors. In recent months, organic dairy farms have been hit particularly hard.

"Almost 40 dairy farms lost, so far, this year, companies from Tubbs to Vermont Wood Energy gone. Magic Mountain, Northern Power and others restructuring. Stowe Resort wondering what to do," noted Pollina. "Layoffs everywhere. Plenty of reorganization and struggle going on."

Rumors of VMC's bankruptcy have circulated almost since its inception, but began to increase last summer and fall during the gubernatorial campaign. Pollina initially ran as a Progressive, but switched before the filing deadline and offered himself to voters as an Independent. He ended up besting the Democrat in the race, former House Speaker Gaye Symington. Both lost to incumbent Republican Jim Douglas.

One rumor had it that the company would fold days after the Nov. 4 election. To the contrary, the company continued to limp along through the year, and into the new.

VMC hired Dennis Myrick of St. Johnsbury to help right-size the company. Nadeau says Myrick deserves a lot of credit for helping VMC almost pull itself into a position of profitability. The company staunched losses in 2008, and was in the black three out of the first five months of 2009.

Myrick told Seven Days last year that plenty of people wanted to see the company fail, if only to see it tarnish Pollina's image.

Still, Myrick fought on as he believed he could make the concept work in Vermont. His tenure ended earlier this year, when he stepped aside after being diagnosed with ALS, or Lou Gehrig's disease.

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