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

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

The company has entered into a restructuring agreement with its lenders and equity holders 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 obtain $200 million in equity once it emerges from 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 this will come from existing lenders. It aims to emerge from Chapter 11 in the first quarter of 2025, according to the statement.

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

Hearthside, acquired by private equity firms Charlesbank Capital Partners and Partners Group Holding AG in 2018, went under heightened security after the New York Times reported last year that the company’s processing plant in Grand Rapids, Mich., employed children migrants. The company at the time called the story a “mischaracterization.”

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

A Hearthside spokesperson said Friday that the company has never knowingly employed minor labor in its facilities and has used all legally available tools, as mandated and administered by the federal government, to adhere to to government regulations in its operations. Hearthside has also significantly reduced its use of staffing agencies and temporary work, the spokesperson said.

Hearthside is struggling with its cash-burning operations and weak earnings. In June, S&P Global Ratings downgraded Hearthside’s credit rating further to junk, citing “large cash shortfalls” and the company’s inability to borrow more through its revolving loan.

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