NEW JERSEY – In a dramatic turn for one of America’s oldest canned food brands, Del Monte Foods has filed for Chapter 11 bankruptcy, citing ballooning debt and post-pandemic challenges that have strained its financial stability.
Filed in a New Jersey bankruptcy court, the company revealed it is carrying approximately $1.245 billion in secured debt. The filing comes just months after a contentious debt restructuring that triggered legal disputes and raised red flags over Del Monte’s solvency.
As part of the bankruptcy proceedings, Del Monte has reached a lender-supported restructuring agreement that includes a plan to sell all or most of its assets. The company also secured $165 million in debtor-in-possession (DIP) financing to fund operations during the process and to provide liquidity while executing the asset sale.
“This agreement allows us to move forward with a sale process while continuing to operate and serve our retail partners,” Del Monte said in an official statement.
Debt-Driven Downturn
The filing caps a turbulent chapter that began with Del Monte’s acquisition by Del Monte Pacific Ltd. (DMPL), a Singapore-listed firm, from a group led by private equity titan KKR. The acquisition was heavily financed through debt placed directly on Del Monte’s books, a move that has since proven burdensome.
According to court filings by Chief Restructuring Officer Jonathan Goulding, Del Monte’s annual cash interest expense more than doubled, from $66 million in 2020 to $125 million in fiscal 2025. This rapid escalation outpaced the company’s earnings and drained liquidity, forcing it into a financial corner.
Last year, the company undertook a controversial drop-down transaction, transferring valuable assets beyond the reach of certain creditors. This maneuver enabled Del Monte to raise new funds by borrowing against the shifted assets and offering debt swaps to cooperating lenders. However, non-participating creditors sued, alleging a violation of a $725 million loan agreement.
Despite mounting legal pressure and deepening financial woes, Del Monte has reiterated its commitment to maintaining operations and ensuring a smooth transition under new ownership. The bankruptcy filing aims to preserve the business as a going concern, ensuring continued service to retailers and consumers alike during restructuring.
