KANSAS CITY, Mo. (AP) -- 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.
The company filed for Chapter 11 bankruptcy protection in September 2004.
Under the plan approved by the Teamsters 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.
Investment firm Ripplewood Holdings would invest $44.2 million in cash and $85.8 million in convertible debt in exchange for a 50 percent stake in the new company and an opportunity to later acquire another 15 percent.
Unsecured creditors, who are owed almost $323 million, would receive nothing under the plan. However, they have worked out a compromise under which Interstate Bakeries will pay $890,000 of the creditors' expenses and set aside $5 million in cash to a trust for them.
The company plans to cancel all existing shares and become a private business.