Del Monte Foods files for Chapter 11

September 2025 | DEALFRONT | BANKRUPTCY & CORPORATE RESTRUCTURING

Financier Worldwide Magazine

September 2025 Issue

Following a costly post-pandemic reset and weakening consumer demand, US-based fruit and vegetable company Del Monte Foods has filed for Chapter 11 bankruptcy protection. The move is intended to facilitate a value-maximising sale process and a broader strategic restructuring of its balance sheet.

According to court filings, Del Monte listed liabilities estimated between $1bn and $10bn.

The bankruptcy filing, which excludes certain of the company’s non-US subsidiaries, supports a restructuring support agreement (RSA) with a group of key stakeholders holding portions of Del Monte’s term loan debt. The company’s Philippine subsidiary remains unaffected by the filing and continues to operate with a stable credit outlook, according to PhilRatings.

The RSA outlines a going-concern sale process for all or substantially all of the company’s assets. This process is backed by the lender group under the RSA and aims to secure the best offer to maximise value for all stakeholders.

To support its strategic initiatives and operations, Del Monte has secured a commitment for $912.5m in debtor-in-possession financing. This includes $165m in new funding from certain existing lenders, subject to court approval.

This financing, combined with cash from operations, is expected to provide sufficient liquidity throughout the sale process and support Del Monte’s operations in the ordinary course, including its current pack season.

“This is a strategic step forward for Del Monte Foods,” said Greg Longstreet, president and chief executive of Del Monte Foods. “After a thorough evaluation of all available options, we determined a court-supervised sale process is the most effective way to accelerate our turnaround and create a stronger and enduring Del Monte Foods.”

To facilitate its transition into Chapter 11, Del Monte has filed several customary ‘first day’ motions. Subject to court approval, these motions will allow the company to continue operating without interruption, including the delivery of high-quality food products.

The company’s financial difficulties stem from a combination of factors, including excessive debt incurred in 2023 in anticipation of higher demand that failed to materialise, inflation-driven cost increases, and a decline in its private label business. According to court filings, Del Monte also faced higher promotional spending and outsized production commitments, which further strained liquidity.

In response, the company has closed certain production facilities to reduce its cost base and improve efficiency. Despite these measures, Del Monte’s annual interest expenses continue to exceed projected earnings, leaving it with historically low liquidity.

“While we have faced challenges intensified by a dynamic macroeconomic environment, Del Monte Foods has nourished families for nearly 140 years, and we remain committed to our mission of expanding access to nutritious, great-tasting food for all,” Mr Longstreet added. “I am deeply grateful to our employees, growers, customers and vendors, as well as our lenders for their support in helping us achieve our long-term goals.”

Del Monte is advised by Herbert Smith Freehills Kramer (US) LLP and Cole Schotz P.C. as legal counsel, Alvarez & Marsal North America, LLC as financial adviser, and PJT Partners as investment banker.

For nearly 140 years, Del Monte Foods has pursued its mission to nourish families with the goodness of the earth. As a pioneer in plant-based food, the company continues to innovate to make nutritious and flavourful foods more accessible across its portfolio of brands.

Its product range includes several well-known kitchen staples, such as College Inn broths and Contadina canned tomatoes, alongside its flagship Del Monte brand.

The Chapter 11 filing also reflects broader shifts in the food industry, as consumer preferences evolve toward fresh and health-conscious options. Industry analysts suggest that legacy brands like Del Monte must adapt more rapidly to remain competitive in a market increasingly dominated by private labels and retailer-owned brands.

Mr Longstreet concluded: “With an improved capital structure, enhanced financial position and new ownership, we will be better positioned for long-term success.”

Fraser Tennant