Interstate Bakeries Inc. and the Teamsters ended their standoff over a new union contract, allowing the bankrupt maker of Hostess Twinkies to reorganize with financial backing from buyout firm Ripplewood Holdings LLC.
The Kansas City, Mo.-based company a year ago closed four of its Southern California bread bakeries, lay off about 1,300 workers and said it would stop selling the white Wonder bread in the region.
Lawyers for Interstate announced the deal Friday in U.S. Bankruptcy Court in Kansas City. Under the proposed reorganization, Ripplewood and Silver Point Finance would invest in Interstate and the Teamsters would accept a series of concessions that would save the snack-maker from liquidation.
Interstate and the Teamsters, the Kansas City-based company's biggest union, had been in a stalemate since last year, when talks halted on a new contract. The standoff killed a reorganization plan by Chief Executive Officer Craig Jung designed to bring in $400 million from Silver Point.
Ripplewood is the second financial firm the Teamsters have persuaded to consider investing in Interstate. Ron Burkle's Yucaipa Cos. worked with the Teamsters for months last year, then failed to file a reorganization proposal after Mexican baker Grupo Bimbo SAB pulled out of the joint effort.
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