Hearthside Food Solutions, the US contract manufacturer undergoing Chapter 11 bankruptcy proceedings, plans to close another factory.
A Worker Adjustment and Retraining Notification (WARN), filed with the California Employment Development Department, said 175 staff at Hearthside Food Solutions’ Anaheim plant will lose their jobs when the site closes – slated for 27 April.
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In May last year, Hearthside Food Solutions also announced it would close its snack bars factory in Nashville, Tennessee, affecting 229 jobs.
In a statement provided to Just Food by the co-manufacturer of snacks bars, bakery products, and fresh and frozen goods, the company said its “top priority is supporting all employees during this transition” at the Anaheim site.
The Downers Grove, Illinois-based company set up in 2009, added: “As such, we announced plans to wind down operations in our Anaheim, California plant.
“This winddown period and plant closure will take place over the next several weeks. This difficult decision follows careful consideration of various factors, including market demand, operational efficiency, and costs.”
It emerged last November that Hearthside Food Solutions had filed for bankruptcy in the US after facing difficulties in refinancing its debt.
The frozen burritos and cracker maker submitted voluntary petitions for prearranged Chapter 11 in the US Bankruptcy Court for the Southern District of Texas after reaching a restructuring support agreement with its shareholders.
Backed by private-equity firms Charlesbank Capital Partners and Partners Group Holding since 2018, Hearthside Food Solutions said the restructuring would allow the company to reduce its debt by more than $1.9bn and secure $200m in new equity capital upon the exit from Chapter 11.
The company was also seeking court approval for $300m in debtor-in-possession financing to keep operating during the proceedings.
“As the leading contract food manufacturer, we are constantly evaluating opportunities to optimise our production network across our packaging segments to better position our company to meet the needs of our customers,” Hearthside Food Solutions said in the statement confirming the Anaheim closure.
Just Food has asked Hearthside Food Solutions for an update on the bankruptcy proceedings.
