Popular canned tuna company Bumble Bee Foods said, on Thursday, they have filed for Chapter 11 bankruptcy protection. This order is part of an agreement with the Taiwan-based FCF Fishery, their largest creditor, who will purchase the company’s assets for approximately $925 million.
These bankruptcy proceedings, of course, are meant to reduce Bumble Bee’s growing debt burden, which has resulted from “recent and significant legal challenges,” the company said. Indeed, this will help to facilitate the sale which, hopefully, will bring an end to these legal troubles.
You may recall that Bumble Bee Foods pleaded guilty to price-fixing back in 2017. The United States Department of Justice levied a fine of $81.5 million against them for their participation in a cartel formed with Chicken of the Sea and Starkist. But they reduced the fine to $25 million because of their immense debts. According to the bankruptcy filing, however, Bumble Bee Foods still owes the United States Department of Justice $17 million.
Of course, that would be only the beginning of their legal troubles: they also face multiple civil lawsuits related to this price-fixing scheme. It was only a few months ago that the company confidently settled with US Foods and Sysco.
But it is not just legal troubles that have forced the San Diego-based company to cease operations. Industry-wide there has been quite a decline in the popularity of canned tuna. Recent data indicates that canned tuna consumption is down 42 per capita over the last 30 years (through 2016), as described by the United States Department of Agriculture (USDA).
All that said, the bid from Taiwan’s FCD includes both $275 million in cash as well as another $638.5 million in debt. Should both parties agree to the sale, this transaction would, of course, be subject to receiving better offers for the time the company is still in bankruptcy protection. And also, during this time, Bumble Bee says they expect to maintain US and Canadian operations.
The Columbia River Packers Association founded Bumble Bee Foods in 1899. The company officially introduced what became their beloved canned seafood products in 1910. The company then expanded into San Diego in 1977 after purchasing Harbor Industry cannery.