Downers Grove-based Hearthside Food Solutions, which is under investigation by the U.S. and Illinois labor departments for alleged child labor violations, voluntarily filed for Chapter 11 bankruptcy protection in Texas on Friday.
The food manufacturer, which was named in a sweeping investigation into migrant child labor published by the New York Times last year, said it didn’t expect any disruptions to production or other company operations.
Bloomberg first reported the company, which maintains it has never knowingly employed children at its production facilities and that the allegations were not a primary driver of its restructuring plan, was preparing to file for bankruptcy.
“We have taken decisive action across our company to put our past challenges behind us, and are encouraged by the improvement we have already seen,” the company’s CEO, Darlene Nicosia, said in a statement.
In a news release, Hearthside, a contract food manufacturer that produces packaged foods such as cookies, crackers and frozen foods for other companies, said the restructuring plan would allow it to shed nearly $2 billion in debt while securing around $200 million in new capital at exit. In bankruptcy filings, the company estimated its assets and liabilities to be between $1 billion and $10 billion.
Shortly after the Times published its investigation last year, the Tribune reported the company was under joint investigation by Illinois’ labor department and attorney general’s office. The labor department would not comment on an ongoing investigation, spokesperson Paul Cicchini said Monday.
Last year, one former worker at the company’s production facility in suburban Romeoville told a Tribune reporter that she had worked alongside minors there.
“You could just tell that they weren’t of age; you could see it on their face,” said the woman, who said she is a resident of the Little Village neighborhood.
Hearthside said it “strongly disagrees” with allegations of child labor, which it described as being “principally connected” to one or more third-party staffing agencies with which it has since cut ties. The company said that even though it disputes the allegations, it has reviewed and strengthened its own labor practices, including by reducing its reliance on staffing agencies and temporary labor.
Temps now make up about 10% of its workforce rather than the nearly 50% share they’d made up in the past, according to the company. Hearthside said it now works with fewer than 10 third-party staffing agencies compared with nearly 50 previously.
Rhonda Burke, a spokesperson for the U.S. Department of Labor, said Friday the agency’s investigation into Hearthside is ongoing.
The company, which was acquired by private equity firms Charlesbank Capital Partners and Partners Group in 2018, said it operates about 28 facilities and has a total workforce of more than 12,000. Hearthside operates 10 production facilities in Illinois, according to its website.
