KANSAS CITY, MISSOURI, U.S. — Interstate Bakeries Corp., the largest U.S. wholesale baker, filed for bankruptcy overnight, citing a changing American diet that cut demand for carbohydrate-filled breads and cakes, including the company's Wonder Bread and Hostess Twinkies products.
News reports said Chief Executive Officer James R. Elsesser quit and was replaced by turnaround specialist Antonio C. Alvarez, according to Chapter 11 papers filed in U.S. Bankruptcy Court in Kansas City, the company's headquarters. Interstate listed U.S.$1.63 billion of assets and U.S.$1.32 billion of debts in the filing, the reports said.
The news reports indicated the company filed its bankruptcy papers electronically around midnight Tuesday. The reports also said Chief Financial Officer Ronald Hutchison noted, in the court papers, that consumer interest in low-carbohydrate diets had contributed to the reduced demand for Interstate's products. Reduced carbohydrate consumption increased during the last fiscal year as a result of the popularity of diets such as the Atkins and South Beach diets, he said.
In late August, the company delayed for a second time filing its fiscal 2004 10-K annual report with the Securities and Exchange Commission and revealed it had retained the services of a prominent turnaround consulting firm.
The company previously had obtained an extension until Aug. 27 for filing its 10-K for the fiscal year ended May 29. It sought the earlier extension in connection with an internal audit on workers’ compensation charges.
The delay did not reflect other problems with fiscal 2004 results. On a preliminary basis, IBC in August estimated it lost U.S.$25.8 million in fiscal 2004.
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