Mrs. Fields emerges from bankruptcy
October 24, 2008
by Eric Schroeder
SALT LAKE CITY — Mrs. Fields’ Original Cookies, Inc. announced it has emerged from Chapter 11 bankruptcy "with an improved balance sheet, a good working capital position, and new ownership." The company filed for Chapter 11 in mid-August.
"The prepackaged bankruptcy filing was the perfect means to complete the company’s reorganization," said Michael Ward, interim co-chief executive officer. "Within 60 days of filing the Chapter 11 petition, we were able to significantly de-lever the company’s balance sheet, establish a credit facility to support our working capital needs, and emerge from bankruptcy fully capable of meeting and exceeding customer expectations."
Mrs. Fields said it used the bankruptcy process to create a solid foundation for the future success of its brands and is now poised to generate profitable growth for its franchising, gifting, branded retail, and licensing businesses.
As part of its reorganization plan, Mrs. Fields said it has acquired a 3-year, $10 million senior term credit facility from a select group of its note holders that will be used, in conjunction with cash flows from normal operations, to support the company’s go-forward operations and working capital needs. In addition, the company said it has improved its balance sheet by exchanging bondholder debt for cash, new bonds and a controlling equity stake in the reorganized company.
In 2009, the company expects to open more than 40 new franchised stores, grow its gifting and branded retail businesses by more than 15%, and grow its licensing business by approximately 30%.