Dean Foods (DF) - Get Report , owner of such brands as Land O' Lakes, Tuscan, and Lehigh Valley Dairy Farms, on Tuesday said it filed under Chapter 11 of the bankruptcy laws and intends to work toward "an orderly and efficient sale of the company."

The Dallas dairy distributor, which employs some 15,000 people, said it was in advanced discussions regarding a possible sale of substantially all its assets to Dairy Farmers of America.

In September the company said the board had concluded a strategic review of Dean's operations, including a possible sale of the company, and determined that the best way forward was a stand-alone strategic plan.

"Despite our best efforts to make our business more agile and cost-efficient, we continue to be impacted by a challenging operating environment marked by continuing declines in consumer milk consumption," said Eric Beringause, who in July joined Dean Foods as president and CEO, in a statement on Tuesday. 

The company said it was operating as usual and received a commitment of about $850 million in debtor-in-possession financing from certain creditors, led by Rabobank.

Dean filed in U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.

If the court approves, Dean Foods said it expected to use the DIP financing, together with cash on hand and operating cash flows, to support its operations throughout the process. That includes paying employee wages and benefits without interruption and paying suppliers and vendors.

In light of the bankruptcy filing, the company canceled its quarterly earnings call, which was scheduled for today.

Dean is the largest direct-to-store milk distributor in the U.S. It was founded in 1925 and went public in 1961. 

Dairy Farmers of America, Kansas City, Kan., was formed in 1998 from the combination of four dairy cooperatives.

The website says it now has more than 14,000 dairy-farmer members and 47 plants in the U.S., making cheese, butter, ice cream, dairy ingredients, fluid milk and more. Its brands include Borden's, Breakstone's, Hotel Bar and more.