Kansas City, Mo., Nov. 2 - Los Angeles-based investment fund Yucaipa Cos and the U.S. arm of Mexico-based Grupo Bimbo are offering to take over bankrupt Interstate Bakeries Corp, the maker of Twinkies and Wonder Bread.
Yucaipa, which is controlled by billionaire Ron Burkle, Bimbo Bakeries USA and the International Brotherhood of Teamsters said on Friday they have put together a plan to bring Kansas City-based Interstate Bakeries out of bankruptcy as a successful operation.
The Teamsters union has repeatedly refused to agree to concessions that Kansas City-based Interstate Bakeries, one of the largest wholesale bakers and distributors of fresh-baked bread and sweet goods in the United States, said were critical to a successful reorganization.
"Under IBC's plan, our members were being asked to make the largest sacrifice, putting their faith in an untested delivery system in an entity that had little room for error," said Teamsters general president Jim Hoffa in a statement announcing the Yucaipa action. "It was a recipe for another bankruptcy."
Competition from Bimbo, which produces such brands as Oroweat and Entenmann's, was one factor that eroded IBC's market share in southern California and led it to close several bakeries there last month.
Yucaipa representatives did not respond to calls and Bimbo declined to comment.
Interstate Bakeries, which has been struggling to find the money and union support to successfully emerge from bankruptcy issued a statement Friday that said its own reorganization plan was the "best-known alternative" for constitutents of the bankruptcy.
But it said: "If Yucaipa or anyone else has a better proposal to help IBC emerge from Chapter 11, secure jobs, and maximize value for creditors, the company will welcome the opportunity to review the details of any such proposals."
The company recently had put together a plan in which it could obtain up to $400 million in exit financing from Silver Point Finance LLC if it could negotiate certain labor concessions. The company also negotiated a deal with lenders to convert about $218 million in borrowings into new debt and equity.
Interstate has its next date in bankruptcy court on Wednesday, when it is slated to seek approval to proceed with its own restructuring plan.