Oberweis Dairy, which filed for bankruptcy Friday, has notified the state it plans to lay off 127 workers.
The layoffs are set to begin at the family-owned North Aurora dairy June 11 because of a plant closure, the notification said.
Oberweis Dairy filed for Chapter 11 bankruptcy protection Friday in Chicago after failing to find a buyer to rescue it from financial distress. The century-old dairy, which has been losing money in recent years, owes more than $4 million to its 20 largest unsecured creditors and about $14 million in secured bank debt, according to bankruptcy filings.
The company, known for its old-school bottled milk and ice cream, has 40 stores in Chicago, Indiana, Michigan and St. Louis, grocery distribution and home delivery service. It outsources some manufacturing but has a 27-year-old plant at its North Aurora headquarters.
In its bankruptcy filing, Oberweis Dairy said it had 1,149 employees, of which 933 work part-time, mostly in the dairy stores. Its ranks often swell to more than 1,500 employees during the summer months during peak demand for ice cream at its stores, Kraber said in a declaration filed Monday.
Oberweis filed a motion Monday requesting to pay $340,000 in outstanding wages owed to employees. Payroll averaged about $891,000 every two weeks from January through March this year, according to the filing.
None of the employees are represented by a union or subject to a collective bargaining agreement, according to the bankruptcy filing.
The Illinois Worker Adjustment and Retraining Notification Act requires businesses with 75 or more employees to provide the state with 60 days advance notice of pending plant closures or mass layoffs.
Started in 1915 by Peter Oberweis, an Aurora dairy farmer, the family-owned business grew from a single horse-drawn wagon to a multi-state enterprise with $95 million in revenues last year. But Oberweis Dairy has been losing money in recent years due to increasing consumer demand for dairy alternatives such as plant-based milk, as well as “improvident” capital expenditures, according to the bankruptcy filing.
After four generations in family hands, Jim Oberweis, a Republican politician and grandson of the company founder, made the decision to sell the dairy last year. Unable to find a buyer, the company filed for bankruptcy protection Friday.
Oberweis did not respond to a request for comment Tuesday.
rchannick@chicagotribune.com
