Del Monte Foods files for bankruptcy as it seeks to rebuild brand

Del Monte Foods, whose canned vegetables and effect person agelong been a staple connected market store shelves, announced Monday that it has filed for bankruptcy and volition question a buyer. 

The astir 140-year-old institution is entering Chapter 11 proceedings arsenic portion of a restructuring enactment statement (RSA) with its lenders. 

"After a thorough valuation of each disposable options, we determined a court-supervised merchantability process is the astir effectual mode to accelerate our turnaround and make a stronger and enduring Del Monte Foods," Greg Longstreet, president and CEO of Del Monte Foods, said successful a statement.

Del Monte did not instantly respond to CBS MoneyWatch's petition for comment.

The canned-goods producer, based successful Walnut Creek, California, said it has secured a committedness for $912.5 cardinal from its lenders that volition assistance money the institution passim the going-concern merchantability process and let it to proceed operating. 

Del Monte has betwixt $1 cardinal to $10 cardinal successful some estimated liabilities, according to its court filing with the U.S. Bankruptcy Court for the District of New Jersey. The sale, the California-based institution said successful its statement, volition impact "all oregon substantially each of the Company's assets." In its hunt for a caller buyer, Del Monte said it would prioritize the highest oregon champion offer.

Changing user preferences

Del Monte is the 4th institution successful the nutrient & beverage assemblage to record for Chapter 11 according to information from Debtwire, a information analytics firm.

"Generally, Del Monte says that user request has declined, causing it to incur accrued costs related to surplus inventory that it has had to warehouse and effort to determination disconnected shelves with accrued promotional spending," said Sarah Foss, planetary caput of ineligible and restructuring astatine Debtwire, successful an email to CBS MoneyWatch. "Consumer preferences person shifted distant from preservative-laden canned nutrient successful favour of healthier alternatives," she added.

The determination follows a challenging fewer years for the company, which has issued layoffs and made efforts to downsize to chopped costs. Del Monte past twelvemonth started a indebtedness overhaul, according to Bloomberg.

• Food & Drink
• Bankruptcy
• Chapter 11 Bankruptcy