Subject: [Homestead] No more Twinkies made me crazy, Judge.
Date: Wed, 22 Sep 2004 18:57:59 -0700
Uneconomic giantism can kill a company---it is impossible to
economically ship air inside a gluten foam cross-country when a local
breadmaker doesn't have to ship his product at all---or at least no
farther than from his kitchen to a display case a few steps away.
Kroger made this stupid mistake in the Mid-Atlantic area, which used to
be its most profitable a few years ago, now probably its least. They
owned a fine, newly-equipped Roanoke bakery and shut it down to ship
bread from Cincinnati. Inside political maneuver, nothing to do with
profit or loss.
<http://home.myway.com>
KANSAS CITY, Mo. (AP) - Interstate Bakeries Corp. (IBC
<http://finance.myway.com/jsp/qt/full.jsp?time=0&symbol_search_text=IBC>),
the nation's largest wholesaler baker whose products include Twinkies
and Wonder Bread, filed for Chapter 11 bankruptcy protection early
Wednesday. The company also named a new chief executive.
The electronic filing, made shortly after midnight with the U.S.
Bankruptcy Court for the Western District of Missouri in Kansas City,
listed assets of $1.626 billion and liabilities of $1.321 billion.
The company said it had a commitment, subject to bankruptcy court
approval, from JP Morgan Chase Bank to provide $200 million to pay
suppliers, employees and other operating costs during the
reorganization. It said it would continue operating its bakeries, outlet
stores and distribution centers.
James R. Elsesser, who had been chairman and chief executive officer,
resigned both positions effective Wednesday, and the board named Tony
Alvarez as CEO, with John Suckow to be chief restructuring officer. Both
are with Alvarez & Marsal, a turnaround management firm founded and
headed by Alvarez.
Leo Benatar, a member of the board, was elected to be the non-executive
chairman.
"IBC has some of the most recognizable and popular baked breads and
sweet goods brands in the nation," Alvarez said in a statement. "By
filing for protection under Chapter 11 and obtaining...financing, 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."
Last month the company missed a second deadline for filing its annual
report, after request an extension in May because of a series of
investigations into its reserve fund for workers' compensation claims.
The report was due Aug. 27, but the company said it was still not
finished because of problems with a financial system it started using in
June, uncertainty over results for the current quarter, and questions
about its ability to pay its loans this year.
It also said there was a possibility that auditors would include a
paragraph in the report saying "there may be substantial doubt about the
company's ability to continue as a going concern."
Interstate, with annual sales of $3.5 billion, operates more than 50
bakeries and employs about 34,000, including 600 of them in the Kansas
City area.
The company's shares closed at $3.27 on the New York Stock Exchange
Tuesday, down 13 cents.
A call Wednesday morning to Mark Dirkes, vice president for corporate
marketing and the company spokesman, was not immediately returned.
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