H-Food Holdings: $2B Debt Cut, Emerges as Maker's Pride
ElevenFlo Research
June 7, 202613 min readUpdated September 8, 2026
H-Food Holdings, LLC, the parent of contract food manufacturer Hearthside Food Solutions, filed chapter 11 on November 22, 2024 in the U.S. Bankruptcy Court for the Southern District of Texas, lead case number 24-90586. The filing covered H-Food Holdings and 22 affiliated debtors and was structured from the outset as a balance-sheet restructuring rather than a sale or liquidation, with management seeking to cut roughly $1.9 billion in debt off a capital structure that had grown too heavy for a shrinking earnings base.
The first-day package paired a $150 million new-money DIP facility with a prenegotiated path toward a $200 million equity rights offering, signaling a creditor-supported deleveraging rather than a freefall case. The First Day Declaration of chief restructuring officer Robert M. Caruso framed the going-concern thesis around long-tenured customer relationships and a national manufacturing footprint, while attributing the filing to multi-year margin compression and a 2024 maturity wall. The case moved quickly: the court confirmed the third amended plan on March 11, 2025, and the company emerged on March 31, 2025 under a new name, Maker's Pride LLC.
U.S. Bankruptcy Court, Southern District of Texas (Houston Division)
Case Number
24-90586
Petition Date
November 22, 2024
Confirmation Date
March 11, 2025
Effective Date
March 31, 2025
Judge
Hon. Alfredo R. Pérez
DIP Facility
$150 million senior secured superpriority multi-draw delayed-draw term facility (new money; Wilmington Savings Fund Society, FSB as agent)
Case Snapshot
Margin Compression and the 2024 Maturity Wall
The Hearthside platform. The First Day Declaration describes Hearthside as a food contract manufacturing and packaging platform founded in 2009 and headquartered in Downers Grove, Illinois, operating across refrigerated and frozen, baking, bars and components, and packaging lines. At filing the business ran 28 manufacturing facilities across the United States and Canada and employed about 12,100 workers, including roughly 11,000 permanent and 1,100 temporary employees, about 1,300 of them hourly union workers. Management cited customer relationships averaging roughly 30 years of tenure as the core of its going-concern case.
Earnings squeeze. Management tied the filing to a multi-year decline in profitability. The same declaration reports that wage costs rose 17.2% since 2021, that post-COVID demand for at-home food consumption softened, and that large consumer packaged goods customers shifted some production back in-house, all while the company could not fully pass cost increases through to customers. The result was a drop in adjusted EBITDA from about $258 million in 2021 to a projected $184 million in 2024, leaving a capital structure that management described as no longer supportable against the reduced earnings base.
The maturity trigger. The declaration identifies $301.5 million of debt service coming due in 2024 as the immediate catalyst, a near-term cash demand that management said made a consensual out-of-court fix no longer viable. A roughly $200 million revolver maturing in late November 2024 and approximately $1.903 billion of term loans maturing in May 2025 left the company facing a concentrated wall of obligations it could not refinance on acceptable terms.
Labor scrutiny. Management also cited negative media attention on the company's labor practices, and the related customer scrutiny, as an added pressure point. In December 2024, during the case, Hearthside agreed to a $4.5 million settlement resolving an Illinois state child labor investigation, an assurance of voluntary compliance that required bankruptcy court approval as part of the chapter 11 proceedings.
Capital Structure and the First-Lien Term Loans
The First Day Declaration reports about $2.7525 billion of funded debt plus roughly $304.8 million of capital lease obligations at the petition date. The funded debt was concentrated in a first-lien credit agreement of approximately $2.102 billion, which itself broke into a roughly $200 million revolver maturing on November 23, 2024 and about $1.903 billion of term loans maturing on May 23, 2025.
Beneath the first-lien debt sat a $300 million second-lien term loan due March 2, 2026, leaving a two-tier secured structure stacked above unsecured obligations. The concentration of first-lien maturities in late 2024 and mid-2025, against the projected $184 million EBITDA base, is what management pointed to in framing deleveraging as the central objective of the cases rather than asset sales or going-concern divestitures.
DIP Financing and the WSFS Backstop
The final DIP and cash collateral order, entered December 18, 2024, approved a $150 million senior secured superpriority multi-draw delayed-draw term facility described as entirely new-money financing, with Wilmington Savings Fund Society, FSB serving as administrative and collateral agent for the DIP lenders. S&P Global Ratings assigned the facility a BB issue-level rating and noted that DIP lenders could convert their claims into equity through the contemplated $200 million rights offering on emergence.
The order authorized continued use of cash collateral and granted the prepetition first-lien secured parties replacement liens, adequate-protection liens, and superpriority administrative claims, all subject to the carve-out structure in the order. It tied both DIP borrowing and cash-collateral usage to an approved budget with weekly variance reporting and rolling four-week testing, and required the debtors to give the official creditors' committee the same reporting delivered to the DIP agent and lenders.
The DIP term sheet in the First Day Declaration priced the new-money loans at a DIP margin of 8.50% per annum and structured the facility as backstopped, with each DIP lender entitled to participate pro rata. The debtors filed a separate notice describing how lenders could elect into the facility under those syndication mechanics.
Rights Offering and Exit Financing Package
By the disclosure statement dated January 24, 2025, the restructuring centered on a backstopped $200 million equity rights offering, a $725 million exit first-lien term loan facility, and an exit revolving facility with up to $375 million of commitments. The disclosure statement stated that rights-offering proceeds would repay the DIP facility, fund working capital, and leave at least $100 million of pro forma cash at emergence.
Together the exit facilities carried roughly $1.1 billion of new debt commitments, replacing the prepetition first- and second-lien stack alongside the equity raised through the rights offering. The company later described the completed transaction as eliminating about $2 billion in debt and securing roughly $600 million in new liquidity to support post-emergence operations.
Plan Class Treatment and Creditor Recoveries
Under the disclosure statement, Class 3 first-lien claims would receive their pro rata share of 100% of the exit first-lien term loans and 100% of the reorganized equity, subject to dilution by the rights offering and the management incentive plan. The first-lien lenders took the exit term loans and substantially all reorganized equity as the fulcrum creditors.
Treatment for junior classes was more limited. The disclosure statement provided that Class 4 second-lien term loan claims would receive a cash recovery only if the class accepted the plan and no recovery if it rejected, while Class 6 general unsecured claims would receive the lower of their share of a designated GUC cash recovery or another specified cash amount. Recovery for the second-lien class was therefore conditioned on the class vote.
The confirmation order entered March 11, 2025 records that Classes 3, 4, 5, and 6 voted to accept the plan, and the Kroll ballot tabulation certified acceptance across the voting classes, including the Class 3 first-lien claims and the Class 5 senior unsecured notes claims. All impaired voting classes accepted the plan.
U.S. Trustee Objection and the Purdue Release Fight
The principal contested issue at confirmation was the plan's release structure. The United States Trustee objected to confirmation of the third amended plan, arguing it was unconfirmable because it imposed non-consensual third-party releases and wage and labor releases on parties who did not or could not vote, treated silence under the opt-out procedures as consent, and improperly sought to eliminate the 14-day stay under Bankruptcy Rule 3020(e). The UST grounded the objection in the Supreme Court's decision in Harrington v. Purdue Pharma L.P. and asked the court to deny confirmation, having raised the same opt-out and injunction concerns earlier in its objection to the disclosure statement.
The debtors defended the releases in a confirmation brief, characterizing both the general third-party release and the wage and labor releases as consensual because creditors and employees received notice and a clear opt-out mechanism, which under Fifth Circuit law supports inferred consent. The debtors argued that Purdue addressed only non-consensual releases and did not disturb Fifth Circuit authority permitting consensual opt-out releases, and described the wage and labor releases as integral to limiting indemnification litigation risk for the reorganized debtors.
Judge Alfredo R. Pérez resolved the dispute in the debtors' favor. The confirmation order found the plan's release, injunction, and exculpation provisions appropriate under applicable law, and Law360 reported that the court overruled the U.S. Trustee's objection to the third-party releases. The order also approved the plan supplement materials, including the exit revolving facility documents, exit first-lien term-loan documents, new organizational documents, transaction steps, retained causes of action schedule, and management incentive plan.
KERP, KEIP, and Professional Retentions
The debtors moved on January 15, 2025 to approve a key employee retention plan and a key employee incentive plan, a package Law360 described as roughly $30 million in proposed bonuses. The KERP covered approximately 157 non-insider employees, with go-forward cash awards of about $5.29 million and a stated maximum cost of roughly $7.06 million. The KEIP covered eight senior management insiders, with a target cost of about $12.04 million, a threshold of about $6.02 million, and a maximum of about $24.07 million, with payouts keyed to two equally weighted metrics: sales volume measured in pounds and adjusted EBITDA.
The court approved both plans on February 28, 2025, conditioning KEIP payments on entry of a confirmation order and barring them from reducing distributions to general unsecured creditors.
Advisor roster. Ropes & Gray LLP served as lead restructuring counsel, with Porter Hedges LLP as co-counsel, a roster Law360 profiled at the outset of the case. The disclosure-statement hearing appearance sheet lists Ropes & Gray attorneys Ryan Preston Dahl, Natasha Hwangpo, and Ryan Weinstein and Porter Hedges attorneys Eric English and Jack Eiband for the debtors, with Gibson, Dunn & Crutcher LLP for the ad hoc group of lenders, ArentFox Schiff LLP for DIP agent Wilmington Savings Fund Society, FSB, and McDermott Will & Emery LLP for the Official Committee of Unsecured Creditors.
The court authorized the retention of Alvarez & Marsal North America, LLC and the designation of Robert M. Caruso as chief restructuring officer, approving the engagement terms but expressly declining to approve A&M's completion fee or any other success, transaction, or incentive fee at that stage and barring A&M from charging the 3% administrative fee referenced in its engagement letter. The debtors also sought to retain Deloitte Tax LLP as tax advisor, describing a relationship dating to at least January 2023, and engaged Kroll Restructuring Administration LLC as claims, noticing, and solicitation agent. The Official Committee of Unsecured Creditors retained Berkeley Research Group, LLC as its financial advisor.
Emergence as Maker's Pride
The confirmation order cleared the way for emergence, and the notice of effective date records that the plan became effective on March 31, 2025 after all conditions precedent were satisfied or waived. The company announced the same day that it had completed the financial restructuring and rebranded as Maker's Pride LLC, exiting bankruptcy with about $2 billion less debt and roughly $600 million in new capital.
The post-emergence company continued to consolidate its manufacturing network. Even before emergence, the debtors moved to close the Anaheim, California facility, laying off 175 workers in a March 2025 network consolidation. In March 2026, Maker's Pride announced plans to close two more plants in Shakopee, Minnesota and Salt Lake City by the third quarter of 2026, which it framed as a strategic network optimization focused on automation and growth.
Key Timeline
The court approved initial first-day motions on November 27, 2024, five days after the petition date, and the case ran to plan effectiveness in roughly 130 days. Maker's Pride announced the completed restructuring and new brand identity simultaneously with emergence.
Date
Event
November 22, 2024
Chapter 11 petitions filed for H-Food Holdings, LLC and 22 affiliated debtors; Caruso first-day declaration filed
December 13, 2024
Initial chapter 11 plan and disclosure statement filed
December 17, 2024
$4.5 million Illinois child labor settlement disclosed
December 18, 2024
Final DIP and cash collateral order entered
January 15, 2025
KERP / KEIP motion filed
January 24, 2025
Updated disclosure-statement package filed
February 28, 2025
KERP / KEIP order entered
March 3, 2025
U.S. Trustee objection to plan confirmation filed
March 11, 2025
Third amended plan confirmed
March 31, 2025
Plan effective; company emerges as Maker's Pride LLC
Key Timeline
Frequently Asked Questions
Who is the claims agent for H-Food Holdings?
Kroll Restructuring Administration LLC serves as the claims, noticing, and solicitation agent. The firm maintains the official claims register, distributes case notifications, and tabulated the plan voting results certified to the court.
What did the H-Food Holdings plan do?
The confirmed chapter 11 plan was a balance-sheet restructuring that eliminated about $2 billion of debt through a backstopped $200 million equity rights offering, a $725 million exit first-lien term loan, and an exit revolver of up to $375 million. First-lien lenders received the exit term loans and substantially all reorganized equity.
Why did H-Food Holdings file for bankruptcy?
Management attributed the filing to multi-year margin compression, a 17.2% rise in wage costs since 2021, softening at-home food demand, and customers shifting production in-house, against a capital structure carrying about $2.75 billion of funded debt with $301.5 million of debt service due in 2024.
What is H-Food Holdings now called?
The company emerged from chapter 11 on March 31, 2025 and rebranded as Maker's Pride LLC.
This article was researched and written with AI assistance, using court filings, public records, and news sources. AI-generated content can contain errors. Verify all information against primary sources before relying on it. This is not legal or financial advice. Read our full disclaimer.
