(Bloomberg) — Hearthside Food Solutions, a snack maker mired in a child labor scandal last year, filed for bankruptcy after struggling to refinance its debt.

The privately held company, which makes food ranging from frozen burritos to crackers, filed for Chapter 11 in Texas on Friday, listing assets and liabilities of between $1 billion and $10 billion. Bloomberg had reported earlier this week that Hearthside planned to file for bankruptcy.

The company has entered into a restructuring agreement with its lenders and shareholders to “right size” its balance sheet, it said in a statement on Friday. The deal will allow Hearthside to shed more than $1.9 billion in debt and raise $200 million in new equity as it exits Chapter 11.

Hearthside also said it has also asked the court to approve $300 million in debtor-in-possession financing to support its operations through bankruptcy. About half of that comes from existing lenders. It aims to emerge from Chapter 11 in the first quarter of 2025, according to the statement.

Hearthside had been in talks to get its private equity owners to hand over control of the company to creditors, Bloomberg reported in October.

Hearthside, which was acquired by private equity firms Charlesbank Capital Partners and Partners Group Holding AG in 2018, came under increased security after the New York Times reported last year that the company’s processing facility in Grand Rapids, Michigan employed migrant children. The company at the time called the story a “mischaracterization.”

The US Department of Labor opened an investigation into Hearthside after the report, according to the Times. The company said it hired consulting firm KPMG LLP and law firm Paul Weiss, Rifkind Wharton & Garrison to review its practices.

A spokesperson for Hearthside said Friday that the company has never knowingly employed underage labor in its facilities and has used all tools legally available, mandated and administered by the federal government, to comply with state regulations throughout its operations. Hearthside has also significantly reduced its use of staffing agencies and temporary workers, the spokesperson said.

Hearthside has struggled with its cash-burning business and poor results. In June, S&P Global Ratings cut Hearthside’s credit rating deeper to junk, citing “steep cash flow deficits” and the company’s inability to borrow more under its revolving loan.

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