Del Monte Foods Creditors File Lawsuit in Board Takeover Bid

Del Monte Foods Inc. creditors are seeking a court order declaring they had the right to take over the board after it tried to reduce their payout priority through a restructuring.

Black Diamond Commercial Finance LLC is suing on behalf of a group of lenders, saying the canned food company defaulted on a $725 million financing agreement when it shifted the assets securing the loan to newly created subsidiaries. The maneuver—aimed at letting certain other creditors jump the payout seniority of the group represented by Black Diamond—triggered loan provisions that gave the leapfrogged lenders the right to replace Del Monte’s ...