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Fearful about how the cookie will crumble when a $10.25 million
interest payment comes due in September, private equity-backed Mrs.
Fields Famous Brands LLC said it may make a prepackaged bankruptcy
filing if not enough senior noteholders vote for a plan that will prune
$145 million in debt off the company's balance sheet.
The Salt Lake City-based cookie and frozen yogurt retailer, which is majority owned by Capricorn Holdings Inc., said in a statement late Thursday that it has struck a deal with the holders of a majority of its $195.7 million in senior secured notes.
The deal would result in either an out-of-court debt restructuring or a Chapter 11 prepack, depending on how the noteholders vote. The company didn't say what bankruptcy court it planned to submit its petition to, but did note that a Chapter 11 filing would occur no later than Aug. 15. Mrs. Fields was originally formed in 1977, when Debra "Debbi" J. Fields opened Mrs. Fields Chocolate Chippery in Palo Alto, Calif., in 1977. Almost 20 years later, in 1996, Mrs. Fields Original Cookie Co. was formed when Greenwich, Conn.-based Capricorn acquired Mrs. Fields and the Original Cookie Co. Capricorn later expanded the company by acquiring frozen-yogurt maker TCBY (a moniker for "The Country's Best Yogurt") for $140 million in 2000, as well as Pretzel Time and Great American Cookie. Both Pretzel Time and Great American Cookie have since been sold to a subsidiary of NexCen Brands Inc. for $29.3 million and $93.6 million, respectively. Though Mrs. Fields didn't explain what triggered the restructurings, its latest quarterly filings with the Securities and Exchange Commission on March 29 show a company with a hefty debt load that was in danger of a default on its notes. Mrs. Fields listed $147.2 million in assets compared to $247.3 million in debts in the filing and bemoaned recurring net losses and negative cash flows. - Ben Fidler For complete details of the bankruptcy filing, see full story on TheDeal.com and Bankruptcy Insider. See Dealwatch: PE-backed bankruptcies Categories Deal Video
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