Insolvent Italian dairy company Parmalat Finanziaria has decided not to sell the main activities of U.S. dairy operation Farmland Dairies and it is looking for a new chief executive for the company.

MILAN, Italy-Insolvent Italian dairy company Parmalat Finanziaria has decided not to sell the main activities of U.S. dairy operation Farmland Dairies and it is looking for a new chief executive for the company. Parmalat has also proposed placing debt and assets in a new company that could be partly owned by creditors.

The new entity is part of a proposed deal with creditors to be issued by state-appointed insolvency commissioner Enrico Bondi in the coming weeks.

"The restructuring plan will include a proposed agreement with creditors that would see the transfer to a separate assuming entity of all the assets and liabilities of those companies subject to the agreement," Parmalat said.

The proposal "will permit the payment of all privileged and preferential credits and the payment of unsecured credits via the allotment of shares in the assuming entity," it said.

The Parmalat scandal exploded in December when the Italian conglomerate acknowledged it did not have nearly $5 billion (U.S.) in funds it had claimed was in a Bank of America account. Parmalat then went into bankruptcy protection. An audit this year put the company's debt at about $18 billion-eight times more than Parmalat had claimed in September.