Interstate Bakeries Corp. won court approval of a financing deal potentially funding its reorganization and establishing a process to let rival companies bid for the maker of Wonder Bread and Twinkies.
U.S. Bankruptcy Judge Jerry W. Venters in Kansas City, Mo., today approved the proposal to name an affiliate of hedge-fund manager Silver Point Capital LP as the so-called stalking horse bidder. Silver Point is offering as much as $400 million in reorganization funding.
"We have a very good product we are able to present to you today," company attorney J. Eric Ivester told Venters in court. "It is a red-letter day."
The approval sets up a Jan. 22 auction to let other investors bid to replace Silver Point's affiliate as the primary financing source to reorganize Interstate, based in Kansas City, Mo. The Teamsters Union opposes that reorganization plan and is working on a takeover bid with the Yucaipa Cos., the investment firm of billionaire Ron Burkle, and an affiliate of Mexico's biggest baker, Grupo Bimbo SAB.
Should Yucaipa and Grupo Bimbo follow through by filing their own reorganization plan, smaller, unsecured creditors would be able to choose between it and the company's proposal, which is backed by 95 percent of the Interstate's senior debt holders.