While lesser companies may be descending into Chapter 11, Americans can breathe a sigh of relief at the salvation of iconic US food brands such as Twinkies, Ding Dongs, Ho-Hos and Wonder Bread. Commercial baking company Interstate Bakery has inked a $469 million deal to emerge victoriously solvent four years after filing for Chapter 11.
The Yucaipa Companies offered false hope in 2007, expressing interest in Interstate but never filing a plan of reorganisation. Perhaps aghast at the demise of these tasty treats, white knight Ripplewood Holdings has agreed to commit $130 million of capital. Supporting players and fellow Twinkie-lovers have committed a combined $339 million to a secured term loan: credit-focussed investors Silver Point Finance, distressed investment firm Monarch Alternative Capital and private investment firm McDonnell Investment Management. The three lenders hold approximately 53 percent of Interstate's pre-petition secured debt.
Assuming Interstate's two major unions ratify agreed modifications to labour agreements – a condition of the commitments – the nation's favourite goodies will be out of the woods by the agreed 9 February 2009 deadline. In case you don't know, a Twinkie is an oblong sponge cake with a cream filling (see below).