Interstate Bakeries Corporation (IBC) (OTC:IBCIQ) announced today that
the Bankruptcy Court in Kansas City, Missouri has confirmed its amended
joint plan of reorganization. The Court ruled that IBC had met all of
the statutory requirements to confirm its plan.
IBC plans to emerge from Chapter 11 within the next several weeks
concurrently with the funding of its previously announced plan funding
commitments. The Company said that it will be focusing all of its
efforts on finalizing all documentation for the exit financing
contemplated by the plan funding commitments and satisfying the
remaining conditions to closing contemplated under the amended joint
plan of reorganization and the funding commitments. No assurance can be
given that the plan funding commitments will be closed and, accordingly,
that the amended joint plan of reorganization will become effective.
“Today marks an important day in our Company’s future. After a
challenging four-year restructuring we are extremely pleased that we are
in a position to be able to emerge from Chapter 11 as a standalone
company,” said Chief Executive Officer Craig Jung. “Going forward, IBC
will be well positioned upon emergence to compete in the market place
with sufficient cash to fund operations, a renewed focus on driving
innovation and reinvigorating our brands, and the flexibility to test,
qualify, and implement new methods of distribution to meet the changing
needs of our customers.”
Mr. Jung emphasized that, “IBC could not have reached this important
milestone in the reorganization without the hard work and dedication of
every IBC employee nationwide. We owe our employees, on whom tremendous
demands have been placed to make the new, reorganized IBC a reality, a
sincere and heartfelt thanks for a job well done. The support and vote
of confidence we received from our pre-petition lenders, 100% of whom
voted in favor of the Plan, and Ripplewood were critical in our ability
to achieve plan confirmation today and position us to emerge as a
standalone company. Our customers and vendors have also stood with us
through this extremely difficult time, and for their loyalty, we are
extremely grateful,” he said.
The Company also noted that 100% of local bargaining units have ratified
modifications to the collective bargaining agreements that are a
condition of the plan funding commitments. “We greatly appreciate the
critical role union leadership has played in the ratification process,”
Mr. Jung said.
“We will be working hard to satisfy all of the remaining conditions to
the effective date of the plan, paving the way for our emergence from
Chapter 11 as soon as possible,” Mr. Jung concluded.
About the Company
Interstate Bakeries Corporation is one of the nation’s largest
commercial bakers and distributors of fresh-baked bread and sweet goods,
sold under various brand names, including Wonder(R), Merita(R), Home
Pride(R), Baker’s Inn(R), Hostess(R), Drake’s(R), and Dolly Madison(R).
The Company is headquartered in Kansas City, Missouri.
Interstate Bakeries Corporation filed for bankruptcy protection on
September 22, 2004, citing liquidity issues resulting from declining
sales, a high fixed-cost structure, excess industry capacity, rising
employee healthcare and pension costs, and higher costs for ingredients
and energy. The Company continues to operate its business in the
ordinary course as a debtor-in-possession.
Forward-Looking Statement
Some information contained in this press release may be forward-looking
statements within the meaning of the federal securities laws. These
forward-looking statements are not historical in nature and include
statements that reflect, when made, the Company’s views with respect to
current events and financial performance. These forward-looking
statements can be identified by forward-looking words such as “may,”
“will,” “expect,” “intend,” “anticipate,” “believe,” “estimate,” “plan,”
“could,” “should” and “continue” or similar words. These forward-looking
statements may also use different phrases. All such forward-looking
statements are and will be subject to numerous risks and uncertainties,
many of which are beyond our control that could cause actual results to
differ materially from such statements. Factors that could cause actual
results to differ materially include, without limitation: the ability of
the Company to continue as a going concern; the ability of the Company
to obtain the funding contemplated by its previously announced plan
funding commitments; the Company’s ability to obtain ratification from
its unionized workforce of the modifications to their collective
bargaining agreements contemplated by the revised plan of
reorganization; the Company’s ability to implement its business plan;
the ability of the Company to operate pursuant to the covenants, terms
and certifications of its DIP financing facility, as amended and
restated; the ability of the Company to obtain court approval with
respect to motions in the Chapter 11 proceeding filed by it from time to
time; risks associated with third parties seeking and obtaining court
approval for the appointment of a Chapter 11 trustee or to convert the
Chapter 11 proceeding to a Chapter 7 proceeding; risks associated with
cost increases in materials, ingredients, energy and employee wages and
benefits; risks associated with the Company’s restructuring activities,
including the risks associated with achieving the desired savings; the
Company’s ability to successfully reject unfavorable contracts and
leases; the duration of the Chapter 11 process; the ability of the
Company to obtain and maintain adequate terms with vendors and service
providers; the potential adverse impact of the Chapter 11 proceeding on
the Company’s liquidity or results of operations; the Company’s ability
to operate its business under the restrictions imposed by the Chapter 11
process; the instructions, orders and decisions of the bankruptcy court
and other effects of legal and administrative proceedings, settlements,
investigations and claims; the significant time that will be required by
management to implement the revised plan of reorganization; risks
associated with product price increases, including the risk that such
actions will not effectively offset inflationary cost pressures and may
adversely impact sales of the Company’s products; the effectiveness of
the Company’s efforts to hedge its exposure to price increases with
respect to various ingredients and energy; the ability of the Company to
attract, motivate and/or retain key executives and employees; changes in
our relationship with employees and the unions that represent them;
successful implementation of information technology improvements;
increased costs and uncertainties with respect to a defined benefit
pension plan to which we contribute; costs associated with increased
contributions to single employer, multiple employer or multi-employer
pension plans; the impact of any withdrawal liability arising under the
Company’s multi-employer pension plans as a result of prior actions or
current consolidations; the effectiveness and adequacy of our
information and data systems; changes in general economic and business
conditions (including in the bread and sweet goods markets); changes in
consumer tastes or eating habits; acceptance of new product offerings by
consumers and the Company’s ability to expand existing brands; the
performance of the Company’s recent and planned new product
introductions, including the success of such new products in achieving
and retaining market share; the effectiveness of advertising and
marketing spending; any inability to protect and maintain the value of
the Company’s intellectual property; future product recalls or food
safety concerns; actions of competitors, including pricing policy and
promotional spending; bankruptcy filings by customers; costs associated
with environmental compliance and remediation; actions of governmental
entities, including regulatory requirements; the outcome of legal
proceedings to which we are or may become a party; business disruption
from terrorist acts, our nation’s response to such acts and acts of war;
and other factors. These statements speak only as of the date of this
press release, and we disclaim any intention or obligation to update or
revise any forward-looking statements to reflect new information, future
events or developments or otherwise, except as required by law. We have
provided additional information in our filings with the SEC, which
readers are encouraged to review, concerning other factors that could
cause actual results to differ materially from those indicated in the
forward-looking statements.
Sitrick And Company
Lew Phelps or Maya Pogoda, 310-788-2850
