With plans to sell assets to an Asian seafood firm, Bumble Bee Foods has filed for Chapter 11 bankruptcy in the face of criminal fines and lawsuits related to a price-fixing case.
The document was filed yesterday (21 November) with the district court in Wilmington, Delaware, with the details confirmed in a statement from San Diego-based Bumble Bee, which said it has entered into an agreement with affiliates of Taiwan’s FCF Co. to sell its assets to the company for US$925m.
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Bumble Bee, owned by UK-based private-equity firm Lion Capital, was one of the firms that pleaded guilty to charges in a conspiracy to fix prices from 2011 to 2013 amid an investigation by the US Department of Justice. Its former chief executive Chris Lischewski resigned from the business last year having been indicted by a federal court. His trial is ongoing.
In August, Bumble Bee warned it may have to file for Chapter 11 or seek a buyer for the company, claiming it could not afford to pay fines stretching into millions of US dollars without risking insolvency.
Bumble Bee said in the statement FCF will serve as the “stalking horse” purchaser for the sale process: “Its bid will be subject to a court-supervised auction process designed to achieve the highest or otherwise best offer for the company’s business.” Chief executive Jan Tharp said she expects the deal to close within 60 to 90 days.
She added: “It’s been a challenging time for our company but today’s actions allow us to move forward with minimal disruption to our day-to-day operations. We have an experienced leadership team in place and plan to transform our business in bold and innovative ways that will build a legacy worthy of our proud 120-year-old history.”
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By GlobalDataThe company added it has financing from existing lenders to keep the business going while the sale to FCF is being finalised.
“It is our clear intent that all US and Canadian operations continue uninterrupted,” Tharp said. “Employees will get paid, our customer partners can count on us to continue delivering outstanding brands and services, and vendors will be paid in the ordinary course of business.”
