Nov 20, - U.S. bankruptcy court for the District of Delaware approved Lance Inc as the lead bidder for the assets of two privately held snack food companies.
Lance said it has bid $30 million for the combined assets of Archway Cookies LLC and Mother's Cake and Cookie Co. The company plans to use available liquidity under its current credit facilities to fund the acquisition, if it wins the auction.
A stalking horse bid is the first offer made for a bankrupt company's assets from a buyer chosen by the company. That first bid is the one against which all later bids are compared.
Under the court-approved auction procedures, Lance could lose the auction to a higher bidder. Any competing bids must be submitted by the last week of November.
In the event competing bids are received, an auction will be held during the first week of December 2008. The bankruptcy court will conduct a hearing for final approval of the sale in early December 2008.
On Oct. 6, Archway Cookies and Mother's Cake and Cookie had filed petitions for relief under Chapter 11 of the United States bankruptcy code.
Archway Cookies, which was founded in 1930, had been sued by employees in October for allegedly violating federal and California labor laws when employees in Ohio, Michigan and California were abruptly terminated.
Shares of Charlotte, North Carolina-based Lance were down 21 cents at $18.98 Wednesday on Nasdaq.