Long-standing Walnut Creek business files for bankruptcy, jeopardizing nearby employment opportunities
In a significant turn of events, Del Monte Foods, a leading food company with headquarters in Walnut Creek, California, has filed for Chapter 11 bankruptcy. The bankruptcy petition was submitted on July 1 in U.S. Bankruptcy Court in New Jersey.
As part of the restructuring process, Del Monte has entered into a Restructuring Support Agreement (RSA) with its lenders. This agreement outlines the terms for the sale process and restructuring efforts. The company has also secured a $912.5 million commitment from its lenders to support operations during the sale process.
Interested buyers have until mid-September to submit bids for the company. The sale will involve "all or substantially all of the Company's assets," and Del Monte will prioritize the highest or best offer. The process is designed to accelerate the company's turnaround and create a stronger financial foundation.
Del Monte employs around 150 people in Walnut Creek and 2,780 people across North America. However, the company will be closing a processing plant and two warehouses in Yakima, Washington, eliminating 51 full-time roles and roughly 448 seasonal jobs starting Aug. 8. Despite these challenges, management assures that wages, benefits, and vendor payments will continue during the Chapter 11 process.
The company is also seeking additional funding of $165 million for this summer's packing season. Del Monte attributes its financial difficulties to a "perfect storm" of factors, including pandemic whiplash, changing tastes, rising costs, and debt.
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As the sale process unfolds, the timeline for potential buyer bids and auction is yet to be explicitly detailed. However, the court-supervised sale process typically involves several stages, including an initial bidding period, auction, and final sale approval. Specific dates for these stages will be set by the court and announced during the bankruptcy proceedings.
Del Monte Pacific, the parent company based in the Philippines, has announced plans to deconsolidate Del Monte Foods from its financial statements and will not provide further financial support. This decision may influence the overall restructuring and sale process.
As Del Monte Foods navigates through this challenging period, it remains committed to finding a suitable buyer and securing a stronger financial future.
- In the restructuring process, Del Monte is seeking a buyer who will prioritize the highest or best offer for all or substantially all of the company's assets, as part of an effort to create a stronger financial foundation in business.
- Despite the company's financial difficulties arising from a "perfect storm" of factors such as pandemic whiplash, changing tastes, rising costs, and debt, Del Monte remains committed to finding a suitable buyer in finance to secure a stronger financial future.
