I.B.C. requests more time to file plan
September 14, 2007
by Eric Schroeder
KANSAS CITY — Interstate Bakeries Corp. on Thursday asked the U.S. Bankruptcy Court for more time to develop a reorganization plan to return to profitability, saying it is in talks with more than 50 potential investors to obtain funding and get the company back on the right track.
Interstate Bakeries, which has been under Chapter 11 protection since September 2004, faces a deadline of Oct. 5 to submit a plan of reorganization, and its exclusive period to solicit acceptances of any plan of reorganization is set to expire Dec. 5. The company is seeking an extension of the deadlines to Jan. 15, 2008, and March 15, 2008, respectively.
According to I.B.C., the request to extend the deadlines is predicated on achieving agreements with the company’s two principal unions — the International Brotherhood of Teamsters and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union — by Sept. 30. Earlier this week, both unions broke off talks with I.B.C., primarily because of disagreement regarding what to do about wage and benefit cuts and a revamping of the company’s distribution system.
The unions represent 20,000 of the company’s approximately 25,000 employees.
If I.B.C. is not able to reach an agreement with the unions by Sept. 30, the company has asked the Court for interim approval of a 30-day extension from the existing deadline to file a plan of reorganization and a 30-day extension from the existing deadline to solicit acceptances in order to allow sufficient time to formulate a rational strategy for maximizing value of the bankruptcy estates, including a sale of the company and/or its assets in its entirety or in a series of transactions.
Interstate Bakeries said it has contacted more than 50 potential investors and has received "significant interest" to fund the company’s business plan that will provide I.B.C. with sufficient liquidity "to continue operations, position it for future success and maximize value of the bankruptcy estates."
"There can be no assurance, however, that the necessary financing to fund the plan will be provided to the company on acceptable terms or at all," I.B.C. said.