WHITE PLAINS, N.Y. — The bidding procedures currently in place for Hostess Brands, Inc.’s bread brands and Beefsteak brand “are reasonable and will maximize value,” according to a Jan. 24 filing by Hostess in the U.S. Bankruptcy Court for the Southern District of New York.

Two days after Hostess’ Official Committee of Unsecured Creditors filed a limited objection against the Irving, Texas-based baker’s motions to sell its bread brands to Flowers Foods, Inc., claiming, among other things, that the break-up fee is too high, Hostess responded that the 3.5% break-up fee is “well within the range of break-up fees proposed in similar transactions and is reasonable under the circumstances.”

Hostess and Flowers did agree, though, to some modifications in the purchase agreement. First, they agreed to rework the “most favored nation” clause in the purchase agreement following concerns from the creditors. The “most favored nation” clause originally provided that Flowers’ break-up fees would be increased to match any higher fee that is approved by the court in connection with a subsequent sale of at least $10 million of Hostess’ assets. The companies now have agreed to raise the threshold sale amount for triggering the “most favored nation” clause to $30 million from $10 million.

“As a result, the break-up fees will only be increased in the event a higher fee is approved in connection with a subsequent sale of a significant size and comparable to the sale of the Beefsteak brand, a significant sale of a major brand,” Hostess said. “In light of the buyer’s movement on this issue, the ‘most favored nation’ clause is reasonable and adds value to the debtors’ estates by including the buyer to serve as the stalking horse bidder for the majority of the debtors’ bread assets.”

Another modification was the lowering of the amount of the minimum overbid for the sale of the bread business assets to $1 million from $5 million.

“This revision to the bidding procedures reduces the barriers to becoming a qualified bidder,” Hostess said. “Accordingly, for the sake of clarity, a qualified bid for the bread business assets must now include consideration of at least $373.6 million: $360 million to match the buyer’s bid, plus the $12.6 million break-up fee, plus the $1 million minimum overbid.”