EUREKA, Calif. (AP) — Foster Farms Dairy of Modesto is positioning itself to be a major player in the organic milk market by buying part of the bankrupt Humboldt Creamery.

Humboldt's CEO Len Mayer says Foster Farms, the biggest private dairy operation in California, has purchased the company's Fernbridge creamery for $20.5 million.

Foster Farms officials declined to comment Wednesday until the bid in U.S. Bankruptcy Court in Santa Rosa is final.

Members of the Humboldt cooperative were stunned last year when CEO Rich Ghilarducci abruptly resigned. Ghilarducci warned officials there were financial problems with the 80-year-old company that is the center of the Fernbridge economy.

An FBI investigation is ongoing.

Information from: Times-Standard, http://www.times-standard.com

Copyright 2009 The Associated Press.