Del Monte Foods, the American packaged food maker behind brands like Del Monte, Contadina, and College Inn, has filed for Chapter 11 bankruptcy as it looks to sell off most of its assets.
The company, which operates under Singapore-based parent Del Monte Pacific, has struck a restructuring agreement with a group of its lenders.
The deal is aimed at helping Del Monte stay afloat while it moves forward with the sale process.
To help fund operations through the bankruptcy, Del Monte has secured $912.5 million in debtor-in-possession financing from some of its existing lenders.
That includes $165 million in fresh capital to support the company as it works toward a potential sale.
Del Monte bankruptcy: What went wrong?
The bankruptcy proceedings came as Del Monte Foods has been grappling with financial challenges for some time, and last year’s debt restructuring attempt only brought those issues into sharper focus.
In an effort to ease its $240 million debt load, the company undertook a Liability Management Exercise (LME).
But the move backfired when a group of lenders, excluded from the deal, sued alleging that Del Monte had defaulted on a $725 million financing agreement by moving assets beyond their reach.
That legal dispute, which was settled earlier this year, added further pressure to the company’s already strained operations.
According to a recent bankruptcy filing in New Jersey, Del Monte now estimates both its assets and liabilities to fall somewhere between $1 billion and $10 billion.
The company also listed between 10,000 and 25,000 creditors.
Meanwhile, its parent company, Singapore-based Del Monte Pacific, has also struggled to maintain momentum.
For the 2024 fiscal year, it reported flat revenue of $2.4 billion, virtually unchanged from the previous year.
More concerning was a 60% plunge in EBITDA, down to $133.2 million, and a net loss of $127 million after posting a $17 million profit the year before.
These financial troubles come amid broader shifts in consumer preferences.
As people increasingly turn toward fresh, healthier food options, demand for canned and shelf-stable products like packaged juices and preserved fruits has waned.
That trend is taking a toll on legacy brands like Del Monte, which recently shuttered a production facility in Washington.
What’s next?
The food brand is moving forward with what’s known as a “going-concern sale,” a strategy where it plans to sell most or all of its business to a new owner while keeping operations running.
The goal is to preserve the company’s value, protect jobs, and maximize returns for creditors rather than shutting down and liquidating assets.
Despite filing for bankruptcy, the food brand will continue day-to-day operations without interruption.
Stores will stay stocked, and customers won’t see any immediate changes.
This continuity is made possible by a fresh round of financing from some of its existing lenders, which includes both new capital and support for ongoing business needs during the restructuring and sale process.
Del Monte’s product lineup includes its namesake canned fruits and vegetables, College Inn broths and stocks, and ready-to-drink tea offerings under the Joyba brand.
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