Dolly Madison parent hopes its business plan is sweet to creditors

The next step in Interstate Bakeries Corp.'s bankruptcy saga is a mid-March hearing at which the company hopes its reorganization plan is approved.

The Kansas City, Mo.-based snack-food manufacturer began contacting creditors this week by mail, asking them to OK its financial and operational strategy upon exiting Chapter 11 bankruptcy.

Interstate Bakeries owns the Dolly Madison plant at 1969 Victory Dr. in Columbus. The factory, which employs more than 500, makes and distributes a number of sweet treats, including Twinkies and Zingers.

Two weeks ago, an Interstate spokeswoman said there are no plans to reduce output at the Columbus bakery, the only one it has in Georgia.

"The company doesn't have any intentions to do anything like that," spokeswoman Maya Pogoda said. "There haven't been any changes to any of the operations. All of the company continues to operate normally."

Interstate Bakeries has been reporting to the U.S. Bankruptcy Court for the Western District of Missouri in Kansas City. The company filed for Chapter 11 bankruptcy protection in September 2004.

The deadline for its creditors to return reorganization plan ballots is March 3, the company said, with a court hearing scheduled March 12.

The plan calls for $400 million in financing by Silver Point Finance LLC upon exit from bankruptcy. Some creditors will receive full compensation in the form of newly issued stock, the Kansas City Star reported recently. Others will receive 30 cents on the each dollar owed in new stock, while current shareholders receive nothing.

Interstate Bakeries has projected that it will become profitable in 2010 and should see earnings of about $50 million by 2013 under its reorganization plan, the Star reported.

"We are pleased that the court approved our disclosure statement, as that means we continue to have a credible business plan capable of paving our emergence from Chapter 11 and achieving sustainable profitability," Interstate Chief Executive Officer Craig Jung said in a statement.

In a Jan. 29 filing with the U.S. Securities and Exchange Commission, the snack-food maker reported a loss of nearly $19 million on sales of $197.5 million during the four-week period ended Dec. 15.

The company employs 24,000 nationwide, down from 32,000 when it initially filed for bankruptcy protection.