Mrs. Fields Famous Brands--which runs Mrs. Fields and TCBY--has filed for Chapter 11. The company, however, does have a plan in place to pay off its creditors and reemerge from bankruptcy. So this isn't look like some of the other situations we've seen recently with retailers entering bankruptcy, having trouble getting financing and then deciding to liquidate.
Mrs. Fields Famous Brands LLC, which serves up fresh-baked cookies and TCBY frozen yogurt at more than 1,200 franchises across the country, is planning to file for Chapter 11 bankruptcy protection, according to a regulatory filing.
The company was trying to negotiate a restructuring agreement with its senior noteholders, but warned in June that it might have to seek protection from creditors if it couldn't complete theout of court.
In the Securities and Exchange Commission filing, Mrs. Fields indicated it would file a prepackaged bankruptcy reorganization plan with the U.S. Bankruptcy Court in Wilmington, Del. Michael R. Ward, Mrs. Fields's interim co-chief executive, confirmed the company's plans Friday.
Under a prepackaged bankruptcy, Mrs. Fields would file for Chapter 11 protection having already developed a plan to repay its creditors and exit from bankruptcy. Mrs. Fields's restructuring plan calls for its noteholders to exchange their $195.7 million in notes for $90 million in cash, $50 million in new senior secured notes and 87.5% of the company's new common stock. The noteholders are expected to recover 86.5% on their claims.