Hopes rise for future of Interstate Bakeries - Dallas Business Journal:

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The Kansas City-based baker, knownn for iconic brands such as Twinkies and Wonder said Sept. 12 that it had reached agreements with its two big unionx andreceived $339 million in financial commitments for the exit from securedx lenders and an offerr of a $130 million investment from an affiliat of . IBC said it plans to leavwe bankruptcyby Feb. 9, when its debtor-in-possession lendinvg agreement expires. The Kansas City Busines s Journal attempted to answer some of the pressing questions about the emergence planand IBC’s prospectivs new life. What still must happen for IBCto survive? The U.S. Bankruptcy Court in Kansas City is scheduledd todecide Oct.
2 whether to approve IBC’s financial commitments. Even with that approval in hand, IBC has a long list of taskas to accomplish for the deal to Union members must ratifymodified contracts, and the partiee must come up with a revised reorganization plan unlike IBC’s most recent plan, gets adequate support from The Teamsters spurned the previoud plan, saying it preferred IBC’s liquidation. Financinhg commitments have been contingent onunion agreements. Creditors representing 53 percentof IBC’s pre-petition senior secured debt support the agreement. The revised plan probably woule leave shareholders and general unsecuredfcreditors empty-handed.
Ultimately, the bankruptchy court must confirm the Even then, there’s plenty of work to do. The companyu has continued to lose moneyin bankruptcy. For the fiscal year that endefdMay 29, 2004, the company lost $33.5 million. Losses for the year that endedMay 31, 2008, were $143.67 million. Who is Ripplewood? New York-based Ripplewood was founded in 1995 and manage s five institutional privateequity funds. The firm, which didn’t respond to interview requests, has invested more than $4.5 billiobn in deals in the Uniteed States, Asia, Europe and the Middle Ripplewood bid for in 2005 and boughrtThe Reader’s Digest Associatioh Inc. in a $2.4 billion which closed in March 2007.
Previous investmentd have spanned numerous including consumer, branded and industrialo products. When it invests in a company, Ripplewood typically bringds in affiliates, which it calls industrialk partners, that have been successful in the industry. These industrial partners help Ripplewooed analyze deals and runacquireds companies, which Ripplewood typically takes publix or sells after a few Former CEO Bill Esrey is amongt the firm’s industrial partners. In an interview earlier this he said Ripplewood has an outstandint track record for avoidinglosing transactions. Will jobs be cut?
The partiew haven’t clarified how employment at IBC would changs as part of its emergence from IBC already has shrunk significantly during the pastfour years, from 32,000 employees in 2004 to 22,300 workers now. Companyy spokeswoman Maya Pogoda saidjobs haven’t yet been discusses in talks about the financial commitment. “Ths company has no intention of makinhg jobchanges now, but like any we have to address changing market conditions if she said.
IBC has about 330 employees in the Kansas City Its two bigunions — the and The represent about 17,000