Amended I.B.C. plan to pay unsecured creditors 26%
January 28, 2008
by FoodBusinessNews.net Staff
KANSAS CITY — Interstate Bakeries Corp. on Jan. 25 filed a revised reorganization plan that would pay unsecured creditors 26.1% of the $193,865,215 they are owed while giving shareholders nothing.
Secured creditors and the company’s lenders, meanwhile, would receive the full value of their claims. I.B.C.’s plan calls for the company to issue 3,333,333 shares of new common stock, which would go to holders of secured claims, including $450,178,612 owed to lenders, as well as an additional 50 million shares of Class B stock that would be sold to repay the $320 million owed to unsecured creditors.
U.S. Bankruptcy Judge Jerry Venters is scheduled to consider the company’s plan during a hearing Tuesday and decide whether to allow the company to begin seeking creditor approval.
In addition, I.B.C.’s plan calls for Silver Point Finance L.L.C. to provide $400 million in post-bankruptcy funding. Including debt-to-equity swaps, the plan values the company at $580 million.
A sticking point during the bankruptcy proceedings has centered on I.B.C.’s negotiations with its unions.
Although I.B.C. has reached agreement to certain concessions from more than 95% of the bargaining units represented by the Bakery, Confectionery, Tobacco Workers & Grain Millers International Union, the company has yet to resolve its differences with the International Brotherhood of Teamsters, which represents about 9,500 I.B.C. workers and whose cooperation is required for the reorganization plan to move forward.
Talks between the union and the company broke off in October over proposed welfare concessions and a proposed revamping of the company’s distribution system, which the union claims will cost its members jobs.