KANSAS CITY — Members of the Teamsters union have overwhelmingly approved modifications to their contract with Interstate Bakeries Corp., clearing the way for the maker of Twinkies and Wonder Bread to come out of bankruptcy no later than February.
The union, which represents about 9,500 of the company's 23,000 employees, helped torpedo a previous reorganization plan after Interstate Bakeries was unable to gain workplace and welfare concessions.
"IBC Teamsters were faced with a difficult decision and they voted loud and clear to preserve good American jobs at Interstate Brands Corporation,'' Teamsters General President Jim Hoffa said. "The newly ratified agreement paves the way for the company to exit bankruptcy as a stand-alone entity, which is the best opportunity for our members to keep their jobs.''
The company filed for Chapter 11 bankruptcy protection in September 2004.
Under the plan approved by the Teamsters on Wednesday, Silver Point Capital LP and two other lenders who together hold $451 million of Interstate Bakeries' pre-petition secured debt will exchange that for $147.3 million in notes and $85.8 million in debt that can be exchanged for shares in the reorganized company.
Silver Point and Monarch Master Funding Ltd. would also provide a $339 million loan to help Interstate Bakeries exit bankruptcy, while General Electric Credit Corp. would provide a $125 million revolving loan.