The crumbling economy has claimed its fair share of high-profile victims, and the latest is Mrs. Fields. The cookie and treats company may not be Bear Stearns, but its failure illustrates just how perilous the new economic environment has become. The bakery chain filed Chapter 11, saying that it will be unable to make interest payments on its $196 million in debt this September:
THIS SOLICITATION IS BEING CONDUCTED TO OBTAIN SUFFICIENT ACCEPTANCES OF A JOINT PLAN OF REORGANIZATION PRIOR TO THE FILING OF VOLUNTARY REORGANIZATION CASES UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE. BECAUSE NO CHAPTER 11 CASES HAVE YET BEEN COMMENCED, THIS DISCLOSURE STATEMENT HAS NOT BEEN APPROVED BY THE BANKRUPTCY COURT AS CONTAINING ADEQUATE INFORMATION WITHIN THE MEANING OF SECTION 1125(A) OF THE BANKRUPTCY CODE. FOLLOWING THE COMMENCEMENT OF THEIR CHAPTER 11 CASES, MRS. FIELDS’ ORIGINAL COOKIES, INC. AND CERTAIN OF ITS SUBSIDIARIES EXPECT TO PROMPTLY SEEK AN ORDER OF THE BANKRUPTCY COURT (I) APPROVING (A) THIS DISCLOSURE STATEMENT AS HAVING CONTAINED ADEQUATE INFORMATION AND (B) THE SOLICITATION OF VOTES AS HAVING BEEN IN COMPLIANCE WITH SECTION 1126(B) OF THE BANKRUPTCY CODE AND (II) CONFIRMING THE JOINT PREPACKAGED PLAN OF REORGANIZATION DESCRIBED HEREIN.
If you’d like more of the grisly details, you can read the entire release here. Mrs. Fields has over 1,200 franchisees operating across the country and is backed by Capricorn Investors, a private equity group.
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