KANSAS CITY — Interstate Bakeries Corp. on Jan. 16 said it has not received any qualifying alternative proposals to fund the company’s reorganization.
As a result, no auction will be conducted Jan. 22 as would have been required under the Alternatives Proposal Procedures previously approved by the U.S. Bankruptcy Court in Kansas City.
The deadline for alternative proposals was Jan. 15.
I.B.C. said it has not received a joint plan of reorganization from Yucaipa Companies and the International Brotherhood of Teamsters. Yucaipa and the Teamsters on Dec. 13 submitted what I.B.C. described as a "preliminary indication of interest."
Interstate said it has not had any "substantive communication" with either Yucaipa or the Teamsters since that time.
On Jan. 29, a hearing is scheduled before the bankruptcy court, and I.B.C. said it will seek permission to solicit creditor votes on its reorganization plan.
I.B.C. affirmed it must achieve a "mutually acceptable agreement with its unions on modification to its collective bargaining agreements to implement its business plan and meet the requirements of the plan funding agreement."
While the company has achieved such an agreement with the Bakery, Confectionery, Tobacco Workers & Grain Millers International Union as well as the majority of its remaining unions, it has not come to terms with the Teamsters. I.B.C. said the union "has refused to hold any discussions with the company since mid-October."
In a Jan. 15 filing, Yucaipa submitted objections to the I.B.C. reorganization plan, principally on the grounds that the proposed plan is "unconfirmable."
"The courts should deny approval of the Disclosure Statement (part of the process of soliciting creditor support of the reorganization plan) to, among other things, avoid the waste of time and expense associated with the distribution, review of, and voting thereon."
Making the plan unconfirmable is its dependence on "massive concessions" from the Teamsters, Yucaipa said. The company continued, "The Teamsters have repeatedly and consistently stated that the Teamsters prefer liquidation to that business plan," Yucaipa said.
According to I.B.C., the Teamsters could eventually get their way on that point.
"The company continues to explore all other alternative strategies in the event that such agreement (with the Teamsters) is not reached, including the sale of all or parts of its operations," I.B.C. said.
Yucaipa also was critical of the I.B.C. Disclosure Statement because it provides inadequate information necessary for informed decisions about the reorganization plan. Specifically, the statement does not "adequately describe the debtors’ enterprise value," lacks liquidation analysis and does not provide estimates of claims that will be allowed in each class, Yucaipa said.