A firm that owns the bankrupt Knudsen-Foremost dairy filed a $150-million lawsuit Thursday against Citicorp bank, which refused to advance the ailing dairy money before it went bankrupt.
The suit was filed in Los Angeles Superior Court by Winn Enterprises, which is in bankruptcy. It alleges that Citicorp North America loaned Winn, which owns K. F. Dairies (formerly known as Knudsen), $168 million for the leveraged buyout of Foremost in 1986, knowing the companies would go bankrupt.
Citicorp officials could not be reached for immediate comment.
Before K. F. Dairies tried to buy Foremost, both dairies “were heavily burdened by debt,” the suit said.
The lawsuit seeks $150 million from three former KFD directors.