Post by Deleted on Nov 25, 2019 21:23:49 GMT -5
Bumble Bee Tuna Files for Bankruptcy Following Price-Fixing Scandal
The brand will likely live on with new ownership.
By Mike Pomranz November 25, 2019
Bumble Bee Foods—which along with StarKist and Chicken of the Sea is one of America's largest canned tuna brands—filed for bankruptcy on Thursday and plans to sell its business to the Taiwanese seafood company FCF Fishery. The sale should conclude what has been a wild ride for Bumble Bee since 2015 when a previous sale attempt revealed a massive price-fixing scheme across the entire U.S. tuna industry. But for consumers, store shelves should remain normal despite all the chaos behind the scenes.
Though the Department of Justice had long appeared concerned about price fixing in the canned tuna market, things took a major turn four years ago when Thai Union, owners of Chicken of the Sea, attempted to buyout Bumble Bee to propel its market share past industry leader StarKist, which is owned by South Korea's Dongwon Industries. Chicken of the Sea eventually flipped, working with the feds to avoid prosecution, and from there, Bumble Bee pled guilty in 2017 followed by StarKist a year later.
The writing was on the wall for Bumble Bee at that point: Already looking to sell, the company was now further saddled by a $25 million fine from the DOJ and a litany of additional civil lawsuits, not to mention that their now former-CEO was indicted in the scandal. It all resulting in "spending tens of millions of dollars in defense costs" on top of the fine, according to bankruptcy documents cited by CNN Business.
And yet, despite these moves, Bumble Bee as a brand will still be at your local grocer. "It's been a challenging time for our company but today's actions allow us to move forward with minimal disruption to our day-to-day operations," Bumble Bee president and CEO Jan Tharp was quoted as saying. "Employees will get paid, our customer partners can count on us to continue delivering outstanding brands and services, and vendors will be paid in the ordinary course of business."
If that sounds a bit fishy (pardon my pun), it helps to understand exactly who the bankruptcy filing will affect. According to Fast Company, the creditors with the largest unsecured debt claims are FCF—which will be acquiring the company—and the U.S. Department of Justice, which is still owed $17 million from the 2017 fine. The seafood industry site Undercurrent News reports that, as part of the buyout deal, FCF has agreed to make sure the government gets the rest of its money, theoretically putting an end to that drama. However, civil plaintiffs will reportedly be left out in the cold—which is clearly good for business but not good for non-government groups looking to get paid back for all that price-fixing.
"The initial proposal favors insiders, including FCF, which is a part-owner in Bumble Bee, the stalking horse bidder, and a creditor that is seeking preference for payment of its bills," Christopher Lebsock of Hausfeld, the law firm representing distributors in the civil lawsuits, told Undercurrent. "We intend to be active participants in the bankruptcy process."
www.foodandwine.com/news/bumble-bee-tuna-bankrupt-price-fixing
Watch those varieties go to hell cause of greed.
The brand will likely live on with new ownership.
By Mike Pomranz November 25, 2019
Bumble Bee Foods—which along with StarKist and Chicken of the Sea is one of America's largest canned tuna brands—filed for bankruptcy on Thursday and plans to sell its business to the Taiwanese seafood company FCF Fishery. The sale should conclude what has been a wild ride for Bumble Bee since 2015 when a previous sale attempt revealed a massive price-fixing scheme across the entire U.S. tuna industry. But for consumers, store shelves should remain normal despite all the chaos behind the scenes.
Though the Department of Justice had long appeared concerned about price fixing in the canned tuna market, things took a major turn four years ago when Thai Union, owners of Chicken of the Sea, attempted to buyout Bumble Bee to propel its market share past industry leader StarKist, which is owned by South Korea's Dongwon Industries. Chicken of the Sea eventually flipped, working with the feds to avoid prosecution, and from there, Bumble Bee pled guilty in 2017 followed by StarKist a year later.
The writing was on the wall for Bumble Bee at that point: Already looking to sell, the company was now further saddled by a $25 million fine from the DOJ and a litany of additional civil lawsuits, not to mention that their now former-CEO was indicted in the scandal. It all resulting in "spending tens of millions of dollars in defense costs" on top of the fine, according to bankruptcy documents cited by CNN Business.
And yet, despite these moves, Bumble Bee as a brand will still be at your local grocer. "It's been a challenging time for our company but today's actions allow us to move forward with minimal disruption to our day-to-day operations," Bumble Bee president and CEO Jan Tharp was quoted as saying. "Employees will get paid, our customer partners can count on us to continue delivering outstanding brands and services, and vendors will be paid in the ordinary course of business."
If that sounds a bit fishy (pardon my pun), it helps to understand exactly who the bankruptcy filing will affect. According to Fast Company, the creditors with the largest unsecured debt claims are FCF—which will be acquiring the company—and the U.S. Department of Justice, which is still owed $17 million from the 2017 fine. The seafood industry site Undercurrent News reports that, as part of the buyout deal, FCF has agreed to make sure the government gets the rest of its money, theoretically putting an end to that drama. However, civil plaintiffs will reportedly be left out in the cold—which is clearly good for business but not good for non-government groups looking to get paid back for all that price-fixing.
"The initial proposal favors insiders, including FCF, which is a part-owner in Bumble Bee, the stalking horse bidder, and a creditor that is seeking preference for payment of its bills," Christopher Lebsock of Hausfeld, the law firm representing distributors in the civil lawsuits, told Undercurrent. "We intend to be active participants in the bankruptcy process."
www.foodandwine.com/news/bumble-bee-tuna-bankrupt-price-fixing
Watch those varieties go to hell cause of greed.
