Del Monte Foods files for bankruptcy, plans asset sale amid mounting debt

Canned fruit producer Del Monte Foods has filed for Chapter 11 bankruptcy, less than a year after a controversial debt restructuring that triggered legal backlash and intensified scrutiny of the company's financial health.

The filing, made in a New Jersey bankruptcy court, shows Del Monte is carrying approximately $1.245 billion in secured debt. The company attributed the filing to a combination of factors, including a post-pandemic glut of unsold inventory and the rising cost of servicing its debt amid higher interest rates.

As part of the bankruptcy process, Del Monte has entered into a lender-supported restructuring agreement that includes a plan to sell all or most of its assets.

The company has secured $165 million in debtor-in-possession (DIP) financing, which will be used to fund operations during the bankruptcy and provide liquidity through the asset sale.

The company said in court filings that the restructuring is designed to facilitate a going-concern sale, meaning it intends to continue operating and serving customers during the bankruptcy process.

“This agreement allows us to move forward with a sale process while continuing to operate and serve our retail partners,” Del Monte said in a statement.

The filing caps a turbulent period for the company, which has faced financial strain since it was acquired by Del Monte Pacific Ltd. (DMPL), a Singapore-listed firm, from a group led by private equity giant KKR.

The acquisition was financed largely through debt placed on Del Monte’s balance sheet, the company’s Chief Restructuring Officer Jonathan Goulding noted in court documents.

Goulding revealed that the company’s annual cash interest expense nearly doubled, rising from $66 million in 2020 to $125 million in fiscal 2025 — far outpacing its projected earnings and severely straining liquidity.

Last year, Del Monte executed a complex debt restructuring that included a drop-down transaction, shifting key assets beyond the reach of certain lenders.

This move sparked a lawsuit from non-participating creditors, who claimed the manoeuvre breached the terms of a $725 million loan agreement.

The transaction allowed Del Monte to secure new financing by borrowing against the shifted assets and prioritised cooperating lenders through debt swaps.

Despite the legal and financial headwinds, Del Monte says it remains committed to maintaining operations during the Chapter 11 process and ensuring a smooth transition under new ownership.

—  With inputs from Bloomberg