Interstate considers break-up
Associated Press
Monday, March 10, 2008
KANSAS CITY, Mo. — Interstate Bakeries Corp.’s plan to exit more than three years of bankruptcy went off the rails Friday as the company asked a court to delay a hearing on the plan and said it has begun discussions with a new investor.
It also said it has begun making plans to possibly sell the company in pieces.
U.S. Bankruptcy Judge Jerry Venters late Friday agreed with the request from the Kansas City-based maker of Hostess Twinkies and Wonder Bread to push the confirmation hearing on its reorganization plan from Wednesday to April 23.
In a release, the company said a new potential investor had presented the company a proposal with labor concessions that would be accepted by the International Brotherhood of Teamsters, which represents 9,000 of the company’s workers.
Maya Pogoda, an Interstate Bakeries spokeswoman, confirmed that the investor was Ripplewood Holdings, a New York-based hedge fund that the Teamsters mentioned as a potential investor last week.
Teamsters spokesman David White said Friday the union couldn’t comment on the new investor, but said “we’re hopeful that an investor will be found for the company who we can have a good working relationship with.”
The Teamsters and Interstate Bakeries have been at an impasse since October over work and welfare concessions that the company said are vital to its exit from bankruptcy but which the union says are too severe.
The company’s current reorganization plan called for Silver Point Finance LLC to provide $400 million in post-bankruptcy financing. Interstate Bakeries had polled its creditors on that plan and was scheduled to disclose the results of that voting during Wednesday’s hearing.
But the plan was likely in trouble as a number of creditors have filed opposition motions to the plan. They noted that Silver Point had made the Teamsters concessions a requirement to providing the financing, and the union has said it would rather see Interstate Bakeries liquidated than agree to those changes.
Silver Point’s agreement with Interstate Bakeries expires on Friday, or well before the new reorganization hearing. The company said it would continue negotiating with Silver Point and other potential lenders for new financing but said it couldn’t guarantee success.
Considering that it may not be able to work out a new agreement with Silver Point and negotiations with Ripplewood may fail, the company, which first filed for Chapter 11 bankruptcy protection in September 2004, said it’s also beginning to map out the breakup and sale of the company.
“Under the circumstances, the only prudent course of action for the company is to embark on a dual path and explore alternatives that include the sale of the company in multiple transactions,” Craig Jung, Interstate Bakeries’ chief executive officer said. “As part of this process, we will immediately begin holding discussions with potential strategic purchasers, many of whom have already expressed interest in buying certain of the company’s businesses and assets.”
The company also said it has begin talking with its lenders to extend the June 2 expiration date of its current financing.
Comments
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eiggohp (anonymous) says...
Is this the next big empty hole in Emporia?
March 10, 2008 at 4:57 p.m. ( permalink | suggest removal )
UsayULoveGod (anonymous) says...
If they break it up in pieces anything can happen!
March 10, 2008 at 5:19 p.m. ( permalink | suggest removal )
UsayULoveGod (anonymous) says...
I pray that someone buys this plant and keeps it open , We can not go through another Tyson Fiasco
March 10, 2008 at 5:20 p.m. ( permalink | suggest removal )
nks (anonymous) says...
This would be worse than the Tyson plant IMO. With Dolly, you would have many good paying jobs leaving. Not to mention a higher percentage of the workers would be residents and considered Emporia "citizens". Unlike the % of Tyson employees that simply packed up and moved to the next packing plant. As long as there is a Western Union handy, some dont care where they set up camp.
March 10, 2008 at 5:36 p.m. ( permalink | suggest removal )
hartford (anonymous) says...
nks:
I was offended when I first read what you wrote!
But as I processed what you said, you are exactly right!
___________________________________________________
I just hope this plant stays open. I planned on selling my house months before Tyson did what it did, I could probably still sell it but may take a loss. If Dolly closes, I will not be able to sell. This town will soon, if it isn't already, be in a huge buyers market!
March 10, 2008 at 6:51 p.m. ( permalink | suggest removal )
USNretired (anonymous) says...
Gotta love those unions.
March 11, 2008 at 8:05 a.m. ( permalink | suggest removal )
truelovecharlie (anonymous) says...
Yup, gotta love those unions. I repeat my earlier statement----GREED! Uniions had a proper place when they were first organized. Now, they are just out there for more benefits and less work. The unions would rather see a company like this shut down and everyone lose their jobs, rather than do what it can; within reason, to help the company succeed. You see this all the time with Boing, Car manufacturing companies and other entities. If the teamsters keep this up, your Twinkies will soon be made in Mexico and shipped in.
March 11, 2008 at 9:14 a.m. ( permalink | suggest removal )
allen (anonymous) says...
The teamsters are going to destroy dolly madison.This is so sad.Monkeys sitting behind the wheel of a truck,smoking cigarettes and changing gears every once in a while should not be allowed to determine the fate of ANY company
March 11, 2008 at 11:24 a.m. ( permalink | suggest removal )
vh1983 (anonymous) says...
Please, don't blame the unions. They still serve a very important role. Our country's corporations are making a killing by reducing pay and benefits (through hiring illegals and others willing to work for less) and by outsourcing many different industries. The lower and middle classes are suffering and were it not for the unions the situation would be even worse. The government is doing nothing to ensure that the jobs stay in our country and pay enough to live on, so someone has to stick up for the workers. What irritates me is how the CEOs and executives of the companies are still getting huge bonuses and tons of perks. It's a very unfair system. Emporia is very effected by this kind of thing. It's always been an industrial town and now that all of the factories are closing down and/or moving the main group of people who have called Emporia home will have to leave if they want to find work that actually pays enough to live on.
March 11, 2008 at 11:24 a.m. ( permalink | suggest removal )
truelovecharlie (anonymous) says...
@vh1983-I stand by my statement. The unions were originally formed to prevent sweatshop type labor and working conditions. They now mostly help to cause prices to rise. Yeah, everyone wants more money and better benefits. The only way to achieve that is to get less people to do the work, hold tight on wages and benefits or raise prices. The higher prices go, the more people want and need more pay. What about those that work in fast food? Are you willing to pay $10 per person to eat at McDonalds or Burger King? The bottom line still points to greed as everyong wants a newer and bigger house, a newer vehicle...and that greed is going to close the Interstate Brands and then Twinkies will come from Mexico or China.
March 11, 2008 at 5:50 p.m. ( permalink | suggest removal )
p4nch01 (anonymous) says...
well here I go! I have lived in emporia for 24 years my first job paid me $3.35 an hour now I get paid $ 15 plus an hour thanks to my union! if it wasn't for my union i'm sure the bakery would be paying alot less!! , yea I pay dues but its well worth it ,( money makes money ) AND FOR THE SAKE OF EMPORIA LETS PRAY THAT SOMEONE KEEPS THIS BAKERY GOING!
March 11, 2008 at 6:49 p.m. ( permalink | suggest removal )