Del Monte Foods, a leading canned fruit producer, has filed for bankruptcy following a difficult year marked by financial restructuring issues. The company initiated voluntary Chapter 11 proceedings, securing $912.5 million in debtor-in-possession financing, including $165 million in new funding from certain existing lenders.
The company’s filing with the United States Bankruptcy Court estimates its assets and liabilities to fall between $1 billion and $10 billion. This move follows a troubled period for Del Monte’s parent company, Del Monte Pacific Ltd., which in June chose to skip a payment to its lenders as part of a lawsuit settlement connected to its controversial debt restructuring efforts.
As part of the restructuring, Del Monte Foods plans to undergo a sale process for all or most of its assets, with the intention of keeping operations running and serving its customers during the transition. The financing package and ongoing cash flow from operations are expected to provide sufficient liquidity through the sale process.
Del Monte’s previous debt overhaul, which involved shifting assets to raise fresh liquidity, sparked a lawsuit from lenders who claimed it violated a $725 million financing agreement. The restructuring strategy, known as a drop-down transaction, prioritised certain lenders and created different payment structures.