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Exhibit
99.2
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Contact:
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Sandra Sternberg
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Maya Pogoda
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Sitrick And Company
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310-788-2850
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IBC Requests Extension of Exclusivity
In Talks With Investors to Obtain Plan
Funding
Seeks Modifications to Existing Collective Bargaining
Agreements by September 30
Kansas City, MO – September 13, 2007 --
Interstate Bakeries Corporation (IBC) (OTC:IBCIQ.PK) today filed a
motion with the U.S. Bankruptcy Court requesting an extension of
its exclusive period in which to file a Plan of Reorganization
through January 15, 2008 and its exclusive period to solicit
acceptances of any Plan of Reorganization through March 15,
2008. The current exclusivity periods are scheduled to
expire October 5, 2007 and December 5, 2007,
respectively.
The Company has contacted more than 50 potential investors and has
received significant interest to fund the Company's business plan
that will provide IBC with sufficient liquidity to continue
operations, position it for future success and maximize value of
the bankruptcy estates. There can be no assurance,
however, that the necessary financing to fund the plan will be
provided to the Company on acceptable terms or at all.
The request to extend exclusivity is predicated on achieving
agreements with the Company’s two principal unions by
September 30, 2007. In addition, the indications of
interest for the financing of the business plan that have been
received mandate that such agreements have been
reached. The proposed modifications to existing
collective bargaining agreements call for union alignment to a more
capable and more cost-effective
Path-to-Market, specific health and welfare concessions, and
increased work rule flexibility. IBC’s two principal labor
unions are the Bakery, Confectionery, Tobacco Workers and Grain
Millers International Union (BCTGM) and the International
Brotherhood of Teamsters (IBT). If such agreements are not reached,
the Company, in the same motion, has alternatively asked the Court
for interim approval of a 30-day extension from the existing
deadline to file a plan of reorganization and a 30-day extension
from the existing deadline to solicit acceptances in order to allow
sufficient time to formulate a rational strategy for maximizing
value of the bankruptcy estates, including a sale of the Company
and/or its assets in its entirety or in a series of
transactions.
“Time is of the essence,” according to the
filing. The Company’s debtor-in-possession
financing agreement is currently scheduled to expire on February 9,
2008. IBC does not expect the financing agreement will be extended
unless its emergence from Chapter 11 protection is
imminent. Additionally, the Company believes that it
will be extremely difficult in the current market environment to
find alternative debtor-in-possession financing, making the
financing of the Company's business plan and achievement of
agreements with its two principal labor unions even more critical
to IBC’s ability to survive.
The Company said it plans to transition its decades-old, high-cost
“one-size-fits-all” traditional route delivery
structure to an advanced path-to-market structure it believes
creates better jobs for sales employees and will significantly
drive selling and delivery productivity.
To effect the change, however, the Company said it requires
flexibility to meet constantly changing market
demands. “Currently, IBC is hindered by work rules
under its collective bargaining agreements that prohibitively
restrict how it can operate its business,” the Company said
in its filing. “These agreements must be modified
for the business plan to be implemented.”
The Company has made significant progress with the BCTGM on finding
solutions to the challenges it is facing, including Path-to-Market
and cost structure issues, but discussions with the IBT “have
not been fruitful,” the Company said in court
documents.
About the Company
Interstate Bakeries Corporation is one of the nation’s
largest commercial bakers and distributors of fresh-baked bread and
sweet goods, sold under various brand names, including Wonder
®
, Merita ®
, Home Pride ®
, Baker’s Inn ®
, Hostess ®
, Drake’s ®
, and Dolly Madison ®
. The company is headquartered in Kansas City,
Missouri.
Forward-Looking Statement
Some information contained in this press release may be
forward-looking statements wit
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