US canned seafood giant Bumble Bee Foods has declared Chapter 11 bankruptcy following “legal challenges.” As a result, the company has entered into an asset purchase agreement with FCF Co., a seafood processor and distributor based in Kaohsiung City, Taiwan, in which the company will pay US$925 million for the assets. The declaration of bankruptcy will facilitate the sale and help Bumble Bee reduce its debt burden, according to the announcement. The company anticipates the transaction could close in 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,” says Jan Tharp, President and CEO of Bumble Bee. “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.”
The company’s debt burden stems from legal trouble due to a federal price-fixing case. In 2017, the company pled guilty for its role in a conspiracy to fix the prices of shelf-stable tuna fish and the company agreed to pay a US$25 million criminal fine. Since then, Bumble Bee has been the target of class-action lawsuits from retailers, distributors and consumers.
In the bankruptcy filing, the company listed its liabilities in the range of US$500,000,001 to US$1 billion, according to reports. Meanwhile, under the asset purchase agreement, FCF Co. will serve as the “stalking horse” purchaser under the court-supervised auction process.
“It is our clear intent that all US and Canadian operations continue uninterrupted,” Tharp comments. “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,” she concludes.
