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Yucaipa and the Teamsters Submit Bid for Interstate Bakeries
KANSAS CITY, (PRNewswire-FirstCall), December 16, 2007 - Interstate Bakeries Corporation (IBC) (OTC:IBCIQ) have confirmed that it received a preliminary indication of interest from The Yucaipa Companies, LLC and The International Brotherhood of Teamsters describing a "possible plan of reorganization" for emergence of IBC from Chapter 11.
The document incorporates some of the terms of the Plan of Reorganization filed by IBC on November 5, 2007, but is silent on a number of critical issues, IBC said.
The document states that Yucaipa and the Teamsters will "provide creditors with aggregate consideration based on an enterprise value of $580 million." However, it does not specify how much will be distributed to unsecured creditors. It does not include any business plan. It does not provide any details on how a Yucaipa business plan would be financed, or include any financing commitments. Finally, it does not describe the terms and concessions the Teamsters will provide to the reorganized company, or any indication that any agreement has been reached with any of the other unions that represent more than 11,000 IBC employees.
Because of those and other deficiencies in the document, IBC has concluded that the document is not a Qualified Bid under the terms of the Alternate Proposal Procedures approved by the Bankruptcy Court in November.
The Company does intend to engage in further discussions with Yucaipa and the Teamsters to determine whether they intend to make a complete proposal that provides missing essential information, as described above.
"We are pleased that Yucaipa and the Teamsters continue to express interest in the Company's emergence from Chapter 11. At the same time, we are surprised and disappointed at the lack of substance in their submission. Our goal in the Chapter 11 process is to maximize value for IBC's constituents. We look forward to resolving the many deficiencies in their current document, in order to determine whether they might be able to provide better value to constituents than under the Company's current plan," said Chief Executive Officer Craig Jung.
The preliminary indication of interest IBC received states that the Teamsters agree to work exclusively with Yucaipa until such time as Yucaipa decides not to pursue the possible transaction.
In response, Mr. Jung said, "We call on the Teamsters' leadership to engage in serious discussions with all other interested parties, including IBC, to ensure that all potential plans to maximize value can come to light. IBC continues to stand ready to reach a mutually acceptable agreement with the Teamsters that will save more than 24,000 jobs."
If Yucaipa and the Teamsters provide a definitive and complete proposal, IBC's management and Board of Directors will carefully evaluate it to determine whether it represents the highest or otherwise best proposal, the Company said. In the meantime, IBC will not comment further on the document they submitted December 13.
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