Del Monte Foods Files for Bankruptcy, Seeks Buyer

Del Monte Foods, a company that has been a staple in American households for 138 years, has declared bankruptcy. The brand is now actively seeking a buyer to take over its operations.

Voluntary Chapter 11 Filing

The company announced Tuesday night that it is voluntarily entering Chapter 11 bankruptcy proceedings. The goal is to sell off all of its assets, which include not only the Del Monte brand, but also College Inn broths and other kitchen staples.

According to the American Bankruptcy Institute, Chapter 11 allows a company to reorganize its debts and assets while continuing to operate. It is often the most complex type of bankruptcy proceeding.

Executive’s Statement

“After an exhaustive evaluation of all the options available, we determine that a sales process supervised by the Court is the most effective way to accelerate our recovery and create a stronger and more lasting mounting,” said President and CEO Greg Longstreet in a released statement.

Financing Secured

Del Monte reports it has secured $912.5 million in new financing. This financial injection should keep the company operational throughout the sales process, ensuring normal activity during the peak canning season. Court documents indicate that the company estimates its liabilities to be between $1 billion and $10 billion.

Looking Ahead

Longstreet added that “With an improved capital structure, a strengthened financial position and new owners, we will be better positioned for long-term success.”

He noted that the company has “faced challenges intensified by a dynamic macroeconomic environment,” including shifting consumer preferences. Shoppers are increasingly opting for private label brands.

Changing Consumer Tastes

According to Sarah Foss, global legal director and restructuring in Debtwire, Del Monte “says that consumer demand has decreased, which has generated greater costs related to excess inventory that has had to store and try to get out of the shelves through greater promotions. Consumer preferences have moved away from canned foods with conservatives in favor of healthier alternatives.”

Historical Roots

Del Monte’s history dates back to 1886. By 1909, the company claimed to operate the world’s largest fruit and vegetable canning plant in San Francisco.