Kansas City / MO. (bw) Interstate Bakeries Corporation (IBC) announced that it filed an amended Plan of Reorganization and related Disclosure Statement with the U.S. Bankruptcy Court for the Western District of Missouri.
The filing of the Plan of Reorganization and related Disclosure Statement was made in connection with the plan funding commitments, announced on September 12, 2008, from an affiliate of Ripplewood Holdings L.L.C. (the «Equity Investor») and from Silver Point Finance, LLC, and Monarch Master Funding Limited. As previously announced, the funding commitments form a basis for IBC to emerge from Chapter 11 as a stand-alone company, under the Plan of Reorganization filed with the Bankruptcy Court.
The Plan of Reorganization and related Disclosure Statement filed on October 04, 2008 reflect a substantially impaired recovery for pre-petition senior secured creditors. For general unsecured creditors and equity security holders, the amended Plan of Reorganization and related Disclosure Statement reflect no recovery, although on October 03, 2008 the Company and its pre-petition secured creditors reached a compromise with the Official Committee of Unsecured Creditors appointed in the cases. As a result of the compromise, the Official Committee of Unsecured Creditors withdrew its previously filed objection to the Company´s efforts to obtain Bankruptcy Court approval of the plan funding commitments and agreed to support the Company´s Plan of Reorganization as it will be subsequently amended to reflect the compromise. The Plan of Reorganization has the support of approximately 53,8 percent of the pre petition secured debt holders.
The compromise reached with the Official Committee of Unsecured Creditors, which is subject to definitive documentation, provides for, among other things, the establishment of a creditors´ trust upon IBC´s emergence from Chapter 11 for the benefit of the general unsecured creditors. The creditors´ trust will be funded through a cash payment of five million USD. Costs of administering the trust will be paid from the trust assets. The creditors´ trust will also receive rights to pursue certain litigation claims at the expense of the creditors´ trust. Finally, the creditors´ trust will potentially receive a cash payment upon a future liquidity event with such payment based on the increase, if any, in value of a three percent equity ownership stake in the reorganized IBC in excess of 150 percent of the investment equity value paid by the Equity Investor. There can be no assurance that the litigation claims or the potential cash payment described above will result in any distributable value for general unsecured creditors.
