Milling & Baking News - April 19, 2005 - 11

B U S I N E S S

Appeals court rejects effort to
protect Uncrustables technology
WASHINGTON - The U.S. Court of
Appeals for the Federal Circuit has rejected an effort by J.M. Smucker Co. to
patent its process for making Uncrustables sandwiches.
The Orrville, Ohio, company makes
its sandwiches without a crust using a
crimping method that the company said
should be protected from duplication by
federal law.
Patent examiners at the U.S. Patent
and Trademark Office did not concur,
concluding the crimped edges are similar to those on ravioli or pie.
Smucker owns a general patent for
Uncrustables, purchased from Len
Kretchman and David Geske in 1995.
The two men from Fargo, N.D., had been
baking the products for schoolchildren.

Smucker was seeking additional
patents for its method of making the
sandwiches.
The original patent also is under
review. Smucker asked Albie's Foods
of Gaylord, Mich., to stop producing
ready-made peanut butter and jelly
sandwiches for a school district. Albie's
in 2001 went to a federal judge and then
the patent office to invalidate Smucker's
original patent.
Smucker expressed disappointment
with the decision but said it would not
have an impact on the company's financial performance, either in the short run
or the long run.
"We bought a unique idea for making
an everyday item more convenient and
made a significant investment in the

idea and in developing the innovative
manufacturing technology that makes
Uncrustables so easy to use," the company said.
Producing adequate quantities of frozen sandwiches has proven anything but
simple for Smucker. The company was
blindsided by serious lengthy start-up
difficulties at a new plant in Scottsville,
Ky., devoted to the production of Uncrustables.
While the company said it has made
headway toward fixing the problems,
it has incurred $12.2 million in special
charges so far this year in connection
with the start-up troubles.
The costs primarily consist of additional labor, materials and unabsorbed
overhead, Smucker said.
Uncrustables are available in three
varieties: peanut butter and strawberry
jelly, peanut butter and grape jelly, and
grilled cheese. MBN

Winn-Dixie bankruptcy case heads to Florida
JACKSONVILLE, FLA. - The U.S. Bankruptcy Court has agreed to transfer a
Chapter 11 bankruptcy case for Winn-Dixie
Stores, Inc. from the Southern District of
New York to the Jacksonville Division of the
Middle District of Florida, the company announced April 12.
The Bankruptcy Court in Jacksonville
had yet to assign a judge and case number
on April 12. Winn-Dixie, based in Jacksonville, planned to post the information on its
web site at www.winn-dixie.com when it
became available.
Some creditors argued in favor of moving the case to Jacksonville. Others, includ-

ing the official committee of unsecured
creditors, argued in favor of having the case
remain in New York.
Winn-Dixie
Stores,
Inc. and 23 of its U.S.
subsidiaries on Feb. 21
filed voluntary petitions
for reorganization under
Chapter 11 of the U.S.
Bankruptcy Code.
After the case was assigned to the Southern District of New York, a Winn-Dixie
trade creditor, Buffalo Rock Co., filed a motion March 14 seeking to transfer venue.
Winn-Dixie on March 30 requested that the

Penn Traffic emerges from
Chapter 11 bankruptcy
SYRACUSE, N.Y. - Penn Traffic Co.
emerged from Chapter 11 bankruptcy April
13 after the U.S. Bankruptcy Court for the
Southern District of New York confirmed
the company's Plan of Reorganization.
In connection with the plan, Penn Traffic,
which operates 109 supermarkets in Pennsylvania, New York, Vermont and New Hampshire, closed on two exit financing facilities
consisting of a term and revolving facility of
up to $136 million principal amount and a
supplemental real estate facility of up to $28
million principal amount, as well as a saleleaseback transaction pursuant to which Penn
Traffic sold its five owned distribution centers
located in New York and Pennsylvania to Equity Industrial Partners Corp. for $37 million.
Equity Industrial will lease the distribution
centers back to Penn Traffic for 15 years.
12 / Milling & Baking News, April 19, 2005

Penn Traffic's emergence debt totals
approximately $65 million, including $33
million related to the initial draw on the exit
financing facility and $32 million of capital
leases, mortgages and other debt.
The company's pre-petition secured debt
totaled approximately $233 million, including $82.1 million of capital leases and other
debt.
"Penn Traffic is beginning life as a new
company with a solid capital structure,
greatly reduced debt, disciplined and
improved operations and a strengthened
management team," said Robert Chapman,
president and chief executive officer. "Penn
Traffic today is a leaner, strong competitor
with bright prospects. We are excited to now
redirect our attention from the turnaround
toward growth and profitability." MBN

case be moved to Florida from New York.
"When we initially made the decision to
file in New York, it was
with the understanding
that creditors preferred
that location because of
its convenience," Peter
Lynch, president and chief
executive officer of WinnDixie, said March 30. "In
fact, our research showed that most of our
major creditors either have offices or legal
representation in New York.
"Now that an objection from a creditor
has caused this matter to become an unnecessary distraction, we have asked the court
in New York to agree to move the case to
Jacksonville as soon as possible."
Winn-Dixie stores in eight states and the
Bahamas have remained open since the U.S.
Bankruptcy Court granted final approval
March 18 for the company's $800 million
debtor-in-possession (DIP) credit facility
from Wachovia Bank, N.A. MBN

Niacet hikes price
of monochloroacetic
acid by 4c per lb
NIAGARA FALLS, N.Y. - Niacet
Corp. was to raise the off-list price of
monochloroacetic acid by 4c per lb effective April 15, or as contracts allow.
The company said the move was necessitated by an increase in the cost of
raw materials, energy, packaging and
transportation costs. MBN

bakingbusiness.com / world-grain.com

http://www.winn-dixie.com http://www.bakingbusiness.com http://www.world-grain.com

Milling & Baking News - April 19, 2005

Table of Contents for the Digital Edition of Milling & Baking News - April 19, 2005