Del Monte Foods: Combined Confirmation Hearing and Amended Wind-Down Plan

Del Monte Foods Corporation II Inc., a 139-year-old producer of canned fruits and vegetables, filed for chapter 11 bankruptcy protection on July 1, 2025 in the U.S. Bankruptcy Court for the District of New Jersey, lead case No. 25-16984. The filing followed the company's 2014 acquisition by Del Monte Pacific Limited and reporting on consumer shifts away from shelf-stable processed foods. With more than $1 billion in liabilities, Del Monte entered chapter 11 with $912.5 million in debtor-in-possession financing and a court-supervised sale process that later split the business among three buyers.

As of May 2026, the case has moved from its post-sale phase to plan confirmation. The combined hearing for final approval of the amended disclosure statement and confirmation of the chapter 11 wind-down plan was held on May 12, 2026 before the Hon. Michael B. Kaplan in Trenton, New Jersey, after the hearing was adjourned from May 7. Ahead of the hearing, the debtors filed a First Amended Joint Chapter 11 Plan with technical modifications, all three voting classes accepted the plan, and the U.S. Trustee and several creditor groups filed confirmation objections targeting the plan's third-party releases and exculpation. Separately, Judge Kaplan ruled on the motion to dismiss the adversary proceeding brought by minority lenders over the DIP roll-up, dismissing two of three counts while allowing a declaratory-judgment claim to proceed.

First Amended Plan and Combined Confirmation Hearing

The chapter 11 case has moved into its final phase. After closing the three-way sale of its business segments, Del Monte is pursuing a joint chapter 11 wind-down plan rather than a reorganization. On May 5, 2026, the debtors filed a First Amended Joint Chapter 11 Plan and a companion First Amended Plan Supplement, describing the changes as technical clarifications and non-material modifications responding to formal and informal comments on the plan and asserting that the revisions did not require resolicitation under section 1127 of the Bankruptcy Code. A Second Amended Plan Supplement followed on May 12, 2026, the day of the combined hearing. The plan appoints a Plan Administrator to dispose of remaining assets, make distributions, and wind down the estates; establishes a Plan Administrator Reserve funded from sale proceeds; and appoints a Claims Oversight Administrator to reconcile and administer general unsecured claims after the effective date.

Class treatment. The First Amended Plan provides for administrative consolidation of the debtors for voting and distribution purposes. DIP ABL claims and other secured and priority claims are paid in full from sale proceeds. Class 3 Super-Senior Term Loan Claims and Class 4 General Unsecured Claims are impaired and share in distributable proceeds through a waterfall. Class 4 creditors receive a pro rata share of an $8,000,000 GUC Recovery contribution — funded by the Ad Hoc Term Lender Group from proceeds that would otherwise flow to DIP term loan lenders — together with any remaining waterfall proceeds. Without that contribution, general unsecured creditors were projected to receive no recovery. Existing equity in the parent debtor is cancelled with no recovery, and section 510(b) claims are likewise discharged with no recovery.

Voting results. Stretto's solicitation and tabulation declaration, filed April 28, 2026, reported that all three voting classes accepted the plan. Class 3 Super-Senior Term Loan Claims accepted with 179 ballots (74.17%) representing $462,199,495.91 (78.51%) in favor, against 49 rejecting ballots representing $160,940,523.13. Class 4 General Unsecured Claims accepted with 68 ballots (93.15%) representing $98,253,841.22 (99.87%). Class 5 Other General Unsecured Claims accepted unanimously, with three ballots representing $142,485,344.26. Certain Class 3 ballots received April 24, 2026 — one day after the deadline — were counted after the debtors waived the lateness defect.

Combined hearing. The combined hearing for final approval of the amended disclosure statement and confirmation of the First Amended Plan was adjourned from May 7 to May 12, 2026 and held before Judge Kaplan at the Clarkson S. Fisher U.S. Courthouse in Trenton. An interim disclosure statement and solicitation hearing had previously been held on March 17, 2026. A transcript of the May 12 hearing was filed May 15, 2026, with remote electronic access restricted through August 13, 2026.

Confirmation briefing. Ahead of the hearing, the debtors filed a reply to objections and brief in support of final approval of the disclosure statement and confirmation of the plan on May 6, 2026. The Official Committee of Unsecured Creditors filed a statement in support of confirmation the same day, and the Ad Hoc Super-Senior Term Lender Group filed an omnibus reply and joinder supporting confirmation. The debtors also filed a Revised Proposed Findings of Fact, Conclusions of Law, and Order on May 11, 2026, asking the court to find adequate information under section 1125, satisfaction of the debtors' burden under sections 1129(a) and 1129(b) by a preponderance of the evidence, good-faith solicitation, and Bankruptcy Rule 3016(c) compliance for the Article VIII release, exculpation, and injunction provisions.

Confirmation Objections and Third-Party Release Disputes

Four parties filed objections to confirmation, most of them targeting the plan's release and exculpation framework.

U.S. Trustee objection. The Office of the U.S. Trustee objected to confirmation on April 28, 2026, arguing that the plan improperly deems creditors to consent to third-party releases through failure to opt out, and that the exculpation provision violates Third Circuit law by extending to non-fiduciaries and prepetition conduct. The U.S. Trustee also objected that the debtor releases and injunctions are overbroad, that the plan establishes an improper court gatekeeping role, that it improperly characterizes the plan itself as a settlement agreement, that it impermissibly deems non-voting classes to have accepted the plan, and that it improperly seeks a waiver of the 14-day stay under Bankruptcy Rule 3020(e). The objection specifically challenges Article VIII.D third-party releases, Article IV.H.7 Plan Administrator exculpation, Article XII.C statutory fee language, and the Article XII.D Committee release.

Minority secured lender objection. The Ad Hoc Group of Minority Secured Lenders filed a nine-argument objection to confirmation on April 28, 2026. The group argued that the plan fails to provide for payment of the Super-Senior Term Loan Lenders' section 507(b) claims and is not feasible; that it fails the best-interests test as to the group's members; that it impermissibly classifies similar claims into separate classes; that Class 3 should be deemed to reject the plan and the plan fails the section 1129(b) fair-and-equitable test and unfairly discriminates against the group's deficiency claims; and that the plan was not proposed in good faith. The objection challenges the plan's waterfall, DIP claim treatment, the "Insufficient Funds" provision governing term loan and GUC recoveries, the Wind-Down Budget, and the opt-out third-party release provisions.

Adversary litigation plaintiffs objection. Certain members of the minority lender group that are litigation plaintiffs in the adversary proceeding filed a separate objection on April 28, 2026. They argued that the plan is not feasible because Article IX(B)(17) makes the plan's effectiveness contingent on the outcome of the adversary proceeding, and that the non-consensual third-party release and injunction provisions in Articles VIII(C) through (F) could improperly enjoin or release their pending litigation, invoking the Supreme Court's decision in Harrington v. Purdue Pharma L.P. The objectors challenged inclusion of the litigation plaintiffs within the plan's definition of "Releasing Party."

Smucker objection. The J.M. Smucker Company objected to confirmation on May 4, 2026, contesting the debtors' position that Smucker remains obligated to fund a legacy pension plan after rejection of the Project Bay Purchase Agreement and asserting that it would cease payments to plan participants as of the plan's effective date. Smucker also objected to the Article VIII.D third-party releases to the extent they would impair its reimbursement claims against Del Monte Pacific Limited, which guaranteed the Project Bay agreement, and formally opted out of the third-party releases.

Path to Bankruptcy

Del Monte's chapter 11 filing followed leverage pressures, a 2024 debt restructuring effort and related litigation, declining canned food consumption, a 2023 production build that preceded a sales decline, and steel tariffs that increased can costs.

Acquisition debt burden. On February 18, 2014, Del Monte Pacific Limited—dual-listed on the Singapore Exchange and Philippine Stock Exchange—closed its acquisition of Del Monte Foods' Consumer Products business for $1.675 billion, funded through roughly $745 million in equity and $930 million in long-term financing arranged by Citibank and Morgan Stanley. The transaction left Del Monte with $1.245 billion in secured debt, and industry analysis reported annual interest payments rose from $66 million in fiscal year 2020 to $125 million by fiscal year 2025.

The 2024 liability management exercise. In 2024, Del Monte attempted a liability management exercise aimed at restructuring approximately $240 million in debt. The transaction used a drop-down structure that transferred key assets outside the reach of certain creditors.

The move triggered immediate legal challenges. A group of lenders objected to the restructuring, arguing that the asset transfer improperly subordinated their claims. The litigation was settled in May 2025, and the settlement required Del Monte to accept a loan modification that increased its interest expenses by an additional $4 million annually.

Consumer shift away from canned foods. Consumers have turned away from canned foods in favor of fresh, frozen, and refrigerated alternatives. Canned fruit and vegetable sales declined globally between 2019 and 2024. Fresh food has grown in both value and units for the last two consecutive years, while canned goods declined in units over the same period. Sarah Foss, global head of legal and restructuring at Debtwire, said consumer preferences have shifted away from preservative-laden canned food in favor of healthier alternatives.

Operational decisions and market pressures. In 2023, Del Monte anticipated higher sales volumes and took on additional debt to fund increased production capacity. When sales instead fell in the following fiscal year, the company was left with outsized production commitments, elevated costs, and the need for increased promotional spending to move inventory. Grocery inflation also drove consumers toward cheaper store brands, and the company reported a decline in its private label business.

Tariff exposure. In June 2025, President Trump's 50% tariff on imported steel took effect. For a company that packages its products in metal cans, the tariff was expected to increase the prices it pays for cans.

DIP Financing and the Roll-Up Structure

Del Monte's restructuring strategy centered on a court-supervised sale process designed to transfer the business to new ownership while preserving operations and employment. The company obtained an Interim DIP Order immediately upon filing, enabling continued operations through the 2025 pack season when agricultural products are harvested and processed.

DIP financing structure. The $912.5 million DIP financing package consists of two facilities. The DIP ABL Facility provides $500 million in superpriority senior secured revolving commitments, with JPMorgan Chase Bank, N.A. as agent, carrying interest at SOFR plus 5.50%. It replaced the prepetition asset-based lending facility upon closing and funds working capital, including the agricultural inventory purchases that pack season requires.

The DIP Term Loan totals $412.5 million, with Wilmington Savings Fund Society, FSB as agent, structured as new money lending plus a roll-up of prepetition debt. Of that total, $165 million is new cash infused into the estate, and $247.5 million is a roll-up of the prepetition Super-Senior First-Out Loans into DIP debt with superpriority administrative expense status. The term loan carries interest at SOFR plus 9.50%, split 1.00% cash pay and 8.50% payment-in-kind, elevating those lenders' prepetition claims ahead of other prepetition creditors.

Both facilities mature nine months after the petition date. The DIP Motion was filed July 2, 2025, with interim approval granted the same day. The Final DIP Order was entered August 12, 2025, after a contested hearing process. At the interim stage, the court authorized $100 million in new money borrowing and $150 million in roll-up loans, along with approximately $211.2 million in DIP ABL loans deemed funded to refinance amounts outstanding under the prepetition ABL facility.

The 363 Sale Process and Three-Way Segment Split

The sale process followed a structured timeline established by the Bidding Procedures Order entered August 13, 2025, which set a November 4, 2025 bid deadline and a November 12, 2025 auction. The Ad Hoc Term Lender Group—the same secured creditors providing the DIP term loan—served as the stalking horse bidder through a credit bid, with the bidding procedures permitting no break-up fees, expense reimbursement, or topping fees.

Credit bid dynamics. The credit bid structure allowed the lenders to bid up to the face value of their secured claims without cash funding. Section 363(k) of the Bankruptcy Code generally permits secured creditors to credit bid the amount of their claims at any sale of their collateral, establishing a floor that third-party bidders must exceed. A credit bid sale can limit cash proceeds for junior creditors when the secured debt exceeds the business's enterprise value, because the lenders can exchange debt for ownership rather than provide cash for distributions.

Auction outcome. A Partial Sale Order was entered August 20, 2025. The broader sale process remained active into January 2026, when Del Monte announced three successful bidders for substantially all of its businesses, displacing the stalking horse credit bid. Fresh Del Monte Produce won vegetable, tomato, and refrigerated fruit assets, including the JOYBA beverage brand and global Del Monte brand ownership subject to existing licensing. B&G Foods won the broth and stock business, including College Inn and Kitchen Basics. Pacific Coast Producers won the shelf-stable fruit business and rights to use the Del Monte and S&W brands for shelf-stable packaged fruit and fruit sauces in the U.S., including Puerto Rico, and Mexico. Del Monte later completed sale transactions across all business segments.

Creditor Dynamics and the DIP Roll-Up Adversary Proceeding

The Del Monte bankruptcy generated litigation as stakeholder groups contested treatment of their claims and contracts. Agricultural suppliers, minority secured lenders, and the unsecured creditors' committee all challenged aspects of the sale process and contract assumptions.

Agricultural supplier disputes. Del Monte's business depends on agricultural suppliers who commit to growing specific crops months or years in advance, making contract certainty important. Pacific Coast Producers and Morning Star Packing Company filed a Motion to Compel on July 17, 2025—two weeks after the petition date—challenging the company's treatment of their supply contracts and seeking clarity on whether Del Monte would honor purchase commitments for crops already in the ground. Seneca Foods Corporation filed its own Motion to Compel on October 27, 2025, invoking Bankruptcy Code sections 105(a) and 365(d)(2) to force a decision on its contracts. Multiple additional parties filed objections to cure amounts and contract assignments in November 2025.

Minority secured lender opposition. An Ad Hoc Group of Minority Secured Lenders—separate from the term lender group serving as stalking horse—filed a motion on December 5, 2025 seeking an order adding them to the case to protect their interests. The court denied the motion on December 17, 2025. The dispute escalated in March 2026 when the minority group sought to certify the settlement approval order for interlocutory appeal. The debtors and the majority lender group opposed certification, and the bankruptcy court later denied direct-appeal certification, treating the settlement dispute as too fact-intensive for immediate appellate review and leaving the settlement order intact.

DIP roll-up adversary proceeding. Certain members of the minority lender group commenced Adversary Proceeding No. 26-01018 on January 23, 2026, alleging that the majority lenders' receipt of $247.5 million in DIP roll-up loans breached the pro rata Sharing Provision in Section 2.17 of the Super-Senior Credit Facility. On May 11, 2026, Judge Kaplan issued an OPINION on the majority lenders' motion to dismiss, followed by an ORDER entered May 13, 2026, granting the motion in part and denying it in part under Federal Rule of Civil Procedure 12(b)(6). The court dismissed Count I, the breach-of-contract claim premised on the Section 2.17 Sharing Provision, with prejudice, reasoning that Section 2.17 expressly excludes payments made in accordance with the credit agreement's terms and that the roll-up loans were authorized under the court-approved Final DIP Order. Count II, alleging breach of the implied covenant of good faith and fair dealing, was dismissed without prejudice. The court denied the motion as to Count III, a declaratory-judgment claim, which proceeds to further litigation. The plan's effective date remains contingent on resolution of the adversary proceeding under Article IX(B)(17).

Contract assumption and rejection. Beyond the supplier disputes, the estate faced a wave of objections to cure amounts and contract assignments filed in November 2025. On March 30, 2026, the court entered its first order approving the rejection of certain executory contracts and unexpired leases and the abandonment of certain personal property. The debtors continued to file notices of rejection of executory contracts and unexpired leases through April and May 2026, advancing the wind-down of contracts not assumed by the three successful bidders.

Case Professionals and Committee Activity

The debtors retained Herbert Smith Freehills Kramer (US) LLP as lead restructuring counsel and Cole Schotz P.C. as New Jersey bankruptcy co-counsel. PJT Partners served as investment banker, marketing the business and running the sale process. Alvarez & Marsal North America, LLC provided financial advisory and chief restructuring officer services, and Stretto serves as claims and noticing agent.

The U.S. Trustee appointed an Official Committee of Unsecured Creditors, which retained Morrison & Foerster LLP as lead counsel, Kelley Drye & Warren LLP as co-counsel, Miller Buckfire as investment banker, and Province, LLC as financial advisor. The committee filed objections to aspects of the sale motion, joined mediation proceedings before Chief Judge Christine M. Gravelle, and ultimately filed a statement supporting confirmation of the wind-down plan.

The court entered fee compensation orders on May 7, 2026, including $6,650,403.23 awarded to PJT Partners and additional awards to Alvarez & Marsal, Herbert Smith Freehills Kramer, Cole Schotz, Morrison & Foerster, Kelley Drye & Warren, Miller Buckfire, and Province.

Industry Context: Canned Foods

Del Monte's bankruptcy occurred amid broader industry trends in canned foods. The global canned food market was valued at approximately $112.47 billion in 2024 and is projected to reach $158.70 billion by 2033, a compound annual growth rate of 3.9%. Market research identifies a growing consumer desire for fresh foods as an impediment to growth in developed markets.

Del Monte also faced competition from private label products. Major retailers including Walmart, Kroger, and Costco have expanded their store brand offerings, often pricing them 20–40% below national brands. The company launched Joyba bubble tea in 2021 and expanded its broth portfolio, but those gains did not offset declines in canned fruits and vegetables. Del Monte's filing has been characterized as a watershed moment for the canned food industry.

Distinction from Fresh Del Monte. Del Monte Foods is not affiliated with Fresh Del Monte Produce, a separate publicly traded company that distributes fresh fruits and vegetables and was unaffected by the filing. Del Monte Pacific Limited's international operations, including Del Monte Philippines, are also not included in the U.S. chapter 11 proceedings.

Key Timeline

Frequently Asked Questions

When did Del Monte Foods file for chapter 11 bankruptcy, and why?

Del Monte Foods filed chapter 11 on July 1, 2025 in the U.S. Bankruptcy Court for the District of New Jersey. The 2014 acquisition by Del Monte Pacific Limited left the company with roughly $1.245 billion in secured debt, and annual interest payments nearly doubled from $66 million to $125 million. Combined with declining demand for canned foods, a 2024 debt restructuring effort, and new steel tariffs, the company sought court protection.

What happened at the May 12, 2026 combined hearing?

The bankruptcy court held a combined hearing for final approval of the amended disclosure statement and confirmation of the First Amended Joint Chapter 11 Plan before Judge Michael B. Kaplan in Trenton, New Jersey. The hearing was adjourned from May 7, 2026. A transcript was filed May 15, 2026, with remote access restricted through August 13, 2026.

How did creditors vote on the plan?

All three voting classes accepted the plan. Class 3 Super-Senior Term Loan Claims accepted with 74.17% of ballots and 78.51% of voted amount. Class 4 General Unsecured Claims accepted with 93.15% of ballots, and Class 5 Other General Unsecured Claims accepted unanimously.

Who objected to confirmation of the plan?

The U.S. Trustee, the Ad Hoc Group of Minority Secured Lenders, the minority lenders that are adversary-proceeding plaintiffs, and The J.M. Smucker Company filed confirmation objections. Most objections targeted the plan's opt-out third-party releases and exculpation provisions; the minority lenders also challenged classification, feasibility, and fair-and-equitable treatment.

What did the court rule on the DIP roll-up adversary proceeding?

In an opinion issued May 11, 2026 and an order entered May 13, 2026, Judge Kaplan granted the majority lenders' motion to dismiss in part. The court dismissed the breach-of-contract claim based on the Section 2.17 Sharing Provision with prejudice, dismissed the implied-covenant claim without prejudice, and allowed the declaratory-judgment claim to proceed.

What recovery will general unsecured creditors receive?

Class 4 general unsecured creditors share a pro rata interest in an $8,000,000 GUC Recovery contribution funded by the Ad Hoc Term Lender Group, plus any remaining waterfall proceeds. Without that contribution, general unsecured creditors were projected to receive no recovery.

Who is the claims agent for Del Monte Foods?

Stretto serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

Is Fresh Del Monte Produce affected by this bankruptcy?

No. Fresh Del Monte Produce is a separate publicly traded company that is not affiliated with Del Monte Foods. The two companies share historical origins but have been distinct entities for decades, and Fresh Del Monte Produce is unaffected by the filing.

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