Cookie maker Mrs. Fields Famous Brands LLC says it plans to file for bankruptcy. The company, which has more than 1,200 franchised and licensed Mrs. Fields Cookies and TCBY franchise systems, is seeking votes from creditors for a prepackaged plan of reorganization.
The company does not have stock that is traded publicly, but it has about $196 million in public bonds.
Earlier this week, the company announced the resignation of its CEO and appointed interim co-CEOs. It also announced that it was unable to complete its quarterly report for the period ended June 28, 2008, on time.
The company did note that pending final review, it suffered a net loss of $10.7 million for the 13 weeks ended June 28, compared with a net loss of $1.4 million for the comparable period the prior years. The increase in net loss was due primarily to an impairment of $8.2 million relating to marketable securities, an impairment of intangible assets for the company’s TCBY brands of $2.1 million, decreased contribution from its business units of $1.6 million, and increased general and administrative expenses of $100,000, according to a regulatory filing.
On June 5, Mrs. Fields announced via a regulatory filing that it was seeking creditor support for a “prepackaged” bankruptcy. At the time, the company announced that it had signed a binding restructuring agreement with a group of investors holding Mrs. Fields’ 9 percent and 11.5 percent senior secured notes due in 2011 that offered to exchange those notes for cash, new secured notes, and 87.5 percent of the equity in the company.
The company has since announced several delays and renegotiations of the terms of that restructuring agreement. On August 13, Mrs. Fields said it had reached an agreement with its equity sponsor, Capricorn Investors III, and an ad hoc committee of bondholders, to further modify the terms of its restructuring agreement, but stressed in its latest filing that its prepackaged bankruptcy still has the support of those investors.