IBC files Chapter 11 bankruptcy

Manufacturing News, Source : TheManufacturer.com
Published : 22 Sep 2004 18:10

Interstate Bakeries Corp. (IBC), the largest wholesale baker and distributor of fresh baked bread and sweet goods in the United States, and the maker of Hostess Twinkies and Wonder bread, announced that it and its operating subsidiaries have filed for bankruptcy protection under Chapter 11 of the US Bankruptcy Code.

The company also announced that its Board of Directors had named Tony Alvarez as chief executive officer and John Suckow as chief restructuring officer. Alvarez cofounded and is co-chief executive of the global corporate advisory and turnaround management services firm Alvarez & Marsal, and Suckow is its managing director. Director Leo Benatar was elected non-executive chairman of the company's Board of Directors. James R. Elsesser, the company’s former chairman and CEO, resigned both of his positions.

IBC cited liquidity issues resulting from declining sales, a high fixed-cost structure, excess industry capacity, rising employee healthcare and pension costs and higher costs for ingredients and energy as major factors in its decision to file.

“IBC has some of the most recognizable and popular baked breads and sweet goods brands in the nation,” said Alvarez in a statement. “By filing for protection under Chapter 11…the company should have the liquidity, time and resources necessary to thoroughly identify, assess and address the issues that will enable this company to be successful in the future.”

IBC employs approximately 32,000 workers in 54 bakeries, 1,200 thrift stores and more than 1,000 distribution centers throughout the United States. In the bankruptcy filing, the company listed assets of $1.626 billion and liabilities of $1.321 billion.

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