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Interstate Files Amended Reorg Plan
Interstate filed for bankruptcy protection four years ago.
October 6, 2008
Interstate Bakeries Corp. has moved one step closer to emerging from bankruptcy, saying Monday it has filed an amended reorganization plan with the US bankruptcy court in the Western District of Missouri.
The amended plan stems from a deal the wholesale bakery reached with New York private equity firm Ripplewood Holdings and lenders Silver Point Finance and Monarch Master Funding in mid-September.
A Kansas City, Kansas-based business with 22,000 employees, Interstate filed for bankruptcy protection four years ago. Terms in its reorganization call for Ripplewood to invest $130 million in the business through a $44.2 million cash infusion and $85.8 million of convertible debt paying 5% annually.
In September, following discussions with Interstate union officials and debt holders Ripplewood industrial partners John Cahill and Greg Murphy said the new capital that will enable the company to approach its future confidently. “IBC has outstanding brands in the major bread and snack cake categories that we believe best position the company for future success,” the pair said in a joint statement.
Judge Jerry Venters is overseeing the case for Interstate, which makes a variety of products including Wonder Bread and Twinkies.
Interstate’s pre-petition secured creditors and unsecured creditors committee arrived at a comprise on Oct. 3 that essentially allows the deal to go through since it ends a previously filed objection to the company's funding plans by the unsecured creditors.
As part of the transaction, 53.8% of the pre-petition secured debt holders support the company’s reorganization plan, according to Interstate Bakeries. In addition, the plan would create a creditors' trust with a $5 million payment once Interstate Bakeries emerges from bankruptcy.
Interstate will receive $125 million in asset-based senior debt and a $339 million first lien term loan credit facility in the reorganization. The bankruptcy court has also approved an amendment in Interstate’s debtor-in-possession financing facility, increasing the bakery company’s DIP package to $329 million from $250 million.
Interstate’s deal with Ripplewood means that it must emerge from bankruptcy by Feb. 9, 2009.
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