SCHUMER HELPS TO BROKER DEAL TO SAVE MAKERS OF DRAKES COFFEE CAKE - PRESERVES 230 JOBS IN UPSTATE NEW YORK
Schumer Helped International Bakeries Corporation - Producer of Drakes Coffee Cakes and Hostess Cupcakes -- Reach Deal with GE to Keep Company in BusinessCompany Can Now Emerge from Bankruptcy Without Layoffs or Liquidation22 Employees in Albany County, 48 Employees in Erie, 30 in Monroe, 3 in Niagara, 15 in Oneida, 38 in Orange, 23 in Onondaga, 3 in Ontario, 48 in
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U.S. Senator Charles E. Schumer today announced that he successfully helped broker a deal between International Bakeries Corporation (IBC) and General Electric (GE) that ensures the company can now emerge from bankruptcy, preserving the jobs of the 230 Upstate New Yorkers who work for Drakes Coffee Cakes. Schumer said that the company is a critical employer across New York State and, had a deal not been reached, the company could have closed and the jobs lost. IBC employs nearly 800 people in New York State and more than 22,000 people across the country.
"Upstate New Yorkers can now have their Drakes cake and keep their jobs too," Schumer said. "During these difficult economic times, this is a small glimmer of hope in a community that needs it. I was so proud to work with IBC and GE to broker this agreement and am thankful that GE stepped up to the plate to save this company."
IBC this week emerged from its voluntary Chapter 11 financial reorganization. IBC and eight of its subsidiaries successfully concluded their financial reorganization today, having finalized and executed all required financing arrangements, and having satisfied all other conditions that were necessary to put the company's Amended Joint Plan of Reorganization into effect.
In January of this year, Schumer intervened to help IBC execute a $600 million corporate reorganization plan intended to lead them out of bankruptcy. With new investment coming from a host financial institutions and private investors, GE Capital's $125 million revolving line of credit was critical component of this restructuring. While GE and IBC had been in talks since the summer of 2008 and had previously reached an agreement in principal, no deal had been executed and the company's future was at stake. Schumer personally wrote to GE Capital CEO Michael Neal asking him to hammer out the remaining details of new credit facility.
Interstate Bakeries Corporation is one of the nation's largest commercial bakers and distributors of freshbaked bread and sweet goods, sold under various brand names, including Wonder®, Merita®, Home Pride®, Baker's Inn®, Hostess®, Drake's®, and Dolly Madison®. The Company is headquartered in Kansas City, Missouri.
A key part of IBC's restructuring plan was a $125 million line of credit from GE Capital. Schumer made a direct appeal to GE Capital Chairman Michael Neel asking him to ensure, that despite the turmoil in the credit markets, the two companies reach a financing agreement.
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