The horrendous tribulations endured by Interstate Bakeries Corp. during 4½ years under Chapter 11 bankruptcy prompt the conclusion that last week’s emergence came as close to being a miracle as any corporate event in baking’s modern history. When I.B.C. filed for bankruptcy nearly 53 months ago in September 2004, few observers believed its declared intention to stand as an independent company could be fully realized. Not only has that happened, but I.B.C., while diminished from the No. 1 position at the start, exists as a major competitor with brands intact. All of this justifies a measure of optimism.
Great credit goes to Craig Jung, the chief executive officer who led the company out of bankruptcy and who led in the negotiation of the financial arrangements as well as the new understandings with the unions. Financial details, including control of the business by Ripplewood Holdings L.L.C., a private equity firm, and major new debt from five providers, are complex. Not disclosed are concessions obtained from unions, including the Teamsters that had caused an earlier plan to fail. Hints of negotiations about delivery systems point to significant moves in an area central to the success of a modern wholesale baker.
"We are now a stronger and more competitive company," Mr. Jung stated in marking the end of bankruptcy. That might be considered an odd statement in light of the dismal state of the economy, except for the relatively good performance of baking companies in these difficult times.
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