Famous canned food maker Del Monte Foods has filed for bankruptcy less than a year after a controversial debt deal that led to legal issues.
The company has started Chapter 11 bankruptcy to reorganize its business. It made a deal with some lenders and got $912.5 million in financing to help keep its business running during this process. This includes $165 million in new money.
Court papers say Del Monte Foods has assets and debts estimated between $1 billion and $10 billion.
The bankruptcy filing comes after a difficult year. In June, Del Monte Foods’ parent company, Del Monte Pacific Ltd., skipped a debt payment to settle a lawsuit. The lawsuit was about the debt deal last year, where Del Monte moved some assets away from certain lenders so it could borrow more money. This move, known as a drop-down transaction, upset some lenders because it changed who gets paid back first.
Now, Del Monte Foods plans to sell most or all of its assets but still keep serving customers during the process. The new financing and money from sales should help keep the company running.