Debt financing and bankruptcy
Bankruptcy: Chapter 11 versus other forms of bankruptcy
Thanks in part to concerns about childhood obesity, the low-carb diet craze, and changing consumer tastes, Interstate Bakeries Corp filed for Chapter 11 Bankruptcy in 2004. When the company did so, it was said that although the company was undergoing "reorganization and installed new management...it intended to survive. The company will continue operating its bakeries, outlet stores and distribution centers, and analysts said that its famous brands are unlikely to disappear from store shelves" (Twinkie and Wonder Bread maker files for bankruptcy, 2004, Katu). Hostess was one of Interstate's signature brands. The company showcases a wide range of products, although all fall into the same, relatively undiversified category of baked, sugary goods.
Upon reading that its products would still be offered in stores, consumers might be somewhat confused. How can a company go bankrupt, yet leave supplies...
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