Tuna maker Bumble Bee Foods said Thursday that it has filed for Chapter 11 bankruptcy protection, with an agreement from Taiwan-based FCF Fishery, its largest creditor, to purchase its assets for roughly $925 million.
The bankruptcy proceedings are meant to reduce Bumble Bee’s debt burden caused by “recent and significant legal challenges” and help facilitate the sale. In 2017, the company pleaded guilty for price-fixing and was fined $25 million for forming a cartel with Chicken of the Sea and Starkist. It still owes $17 million to the U.S. Department of Justice, according to its bankruptcy filing.
Bumble Bee is also facing civil lawsuits related to price-fixing. Earlier this year, the company confidentially settled with Sysco and U.S. Foods.
In addition to its legal troubles, Bumble Bee is grappling with the declining popularity of packaged tuna. Consumption of canned tuna has dropped 42% per capita from the last 30 years through 2016, according to U.S. Department of Agriculture data.
FCF’s bid includes $275 million in cash and $638.5 million in debt. Even if both parties agree to the sale, the transaction would be subject to receiving higher or better offers while the company is in bankruptcy protection. London-based private-equity firm Lion Capital bought Bumble Bee in 2010 for $980 million.
Despite the bankruptcy proceedings, Bumble Bee expects that its U.S. and Canadian operations will continue uninterrupted.