Illinois Food Company Suddenly in Bankruptcy, But Good News?

I am no financial genius and don't understand food manufacturing which makes my choice to share this curious since this involves both. Can you explain how an Illinois food company suddenly declaring bankruptcy is really good news. Let's dissect this and see what's going on.

I saw this news shared by Meat + Poultry which oddly enough seems to be a food industry site. Their exact words are "H-Food Holdings LLC, the parent company of contract manufacturer Hearthside Food Solutions, has filed for Chapter 11 bankruptcy protection." It appears their corporate location is in Downer's Grove, Illinois which is where the press release was sent from. This is their facility in Wenona, Illinois.

So when does the good news begin about this Illinois food company's bankruptcy?

The press release says this process will result with $1.9 billion dollars in debt going away and an influx of $200 million into the company coffers when they emerge out of bankruptcy early in 2025 (assuming that works out like they hope).

Even with my admittedly limited math skills, subtracting that humongous amount of debt and having a big pile of cash flow entering the picture is obviously a good thing.

The other good news is the press release says Hearthside Food Solutions will continue to "operate without disruption during the process, including continuing to pay employee wages and benefits, maintaining customer programs, and honoring obligations to vendors". No employees losing their jobs is always good news in my book. Let's hope this Illinois company successfully completes this bankruptcy process like they hope.