Bumble Bee Foods has filed for Chapter 11 bankruptcy protection, citing “recent and significant legal challenges.” In a statement Thursday, the San Diego-based company said it had entered into an agreement with FCF Fishery, its largest creditor, to sell its assets for approximately $925 million.
“It is our clear intent that all U.S. and Canadian operations continue uninterrupted. 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,” Bumble Bee said in a statement.
The FCF bid includes $275 million in cash and $638.5 million in debt. Bumble Bee said it would file bid procedures and a sale motion promptly, and FCF would serve as a stalking horse for the sales process. It said it has sufficient liquidity to fund the business through the closing of the sale, which it anticipated within 60 to 90 days.
“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,” chief executive officer Jan Tharp said in a statement.
In its bankruptcy filing, the company said it owes the Department of Justice $17 million stemming from a 2017 guilty plea when it acknowledged price-fixing and forming a cartel with Chicken of the Sea and StarKist.
Bumble Bee’s CEO at the time, Christopher Lischewski, was indicted and the company was fined $25 million for its role in that conspiracy. StarKist was fined $100 million. Bumble Bee’s fine was initially $136.2 million but that figure was reduced when it was revealed the company could not pay without jeopardizing the viability of the organization.
Lischewski is currently on trial in federal court in Northern California.
Bumble Bee also faces civil lawsuits related to price-fixing.
The company was bought by London-based private-equity firm Lion Capital in 2010 for $980 million.