Hearthside Food Solutions, a contract manufacturer under parent company H-Food Holdings LLC, has initiated Chapter 11 bankruptcy proceedings. This strategic move aims to reduce over $1.9 billion in debt and secure $200 million in fresh capital upon exiting bankruptcy.
The company asserts strong backing from major first and second lien lenders, unsecured noteholders, and equity holders. Hearthside has filed standard “first day motions” to ensure seamless operations throughout the Chapter 11 process, including maintaining employee compensation, customer programs, and vendor obligations.
To sustain operations during the restructuring, Hearthside has requested court approval for $300 million in debtor-in-possession financing.
Darlene Nicosia, CEO of Hearthside, emphasized the significance of this step for the company’s future, highlighting the importance of a sustainable capital structure and new funding to drive innovation and growth in the food manufacturing sector. The company anticipates emerging from Chapter 11 by the first quarter of 2025.
This filing follows a period of controversy for Hearthside, including allegations of employing underage migrant workers, as reported in a February 2023 New York Times article. This restructuring aims to address financial challenges and position the company for long-term stability and success in the food manufacturing industry.
