Milling & Baking News - November 18, 2008 - 10

Business

Teamsters approve agreement
with Interstate Bakeries Corp.

Equity Sharing Plan and receive 7%
of I.B.C.'s total equity.
The Teamsters also agreed to allow I.B.C. to adopt a large format,
Continued from Page 1
modification calls for base pay for direct-store delivery (D.S.D.) and/
to protect Teamster jobs, achieve commission employees to be re- or "drop and go" delivery system
value for our sacrifices and put duced by $110 per week for the term for bread and/or cake but not earthe company in the best position of the modification agreement, with lier than Aug. 1, 2010. The modification also carries the stipulation
to grow," Mr. Volpe said. "We
that the system may only be
have confidence in Ripplewood
implemented after a successful
Holdings and believe that we
test in an area not represented
can work together with the
by Teamsters.
new management team at I.B.C.
The effective date of the
so that it may survive and remodification agreement will be
build."
the first Sunday after I.B.C. exI.B.C. and The Teamsters first
its bankruptcy, and the expiraagreed to end their standoff
tion date will be July 31, 2014.
over a new union contract in
A reorganization plan that
early September. At that time,
would allow I.B.C. to emerge
I.B.C. said national represenfrom bankruptcy protection was
tatives of its two major labor
mailed to creditors earlier this
unions, which, together, repmonth and must be voted on by
resent nearly 17,000 I.B.C. emDec. 1. A confirmation hearing
ployees, agreed to important
has been set for Dec. 5, and if the
modifications to their labor
plan is approved, attorneys for
agreements that are an essential
I.B.C. said the company would
component of the plan funding
emerge from bankruptcy by Dec.
commitments.
Among the modifications, James P. Hoffa, general president of the International 15. I.B.C., which filed for Chapter 11 bankruptcy protection in
The Teamsters agreed that once Brotherhood of Teamsters
September 2004, is expected to
I.B.C. exits bankruptcy hourly
employees' wages will be reduced the weekly reduction lowered in in- receive a $130 million investment
by $10 per week. The pay cut will crements, to $90 per week, then to from Ripplewood Holdings and a fibe removed in increments, to $8 $45 per week, then eliminated alto- nancing package of $469 million from
per week, then to $5 per week, gether if I.B.C. reaches pre-set earn- a group of lenders including Silver
Point Capital LP. The company also
and then eliminated altogether ings levels.
In exchange for the reductions, all plans to cancel all existing shares and
if the company reaches certain
pre-set earnings levels. Another employees will share in a Teamsters take the company private. MBN

Terms adjusted in sale of U.S.
Sugar land to Florida
CLEWISTON, FLA. - Negotiations
in the massive land deal between
U.S. Sugar Corp. and the state of
Florida have been concluded but
several terms have changed significantly since the agreement was first
announced in June.
Final terms of the pending contract
include the sale of U.S. Sugar's real estate properties of about 181,000 acres
"in environmentally strategic areas"
for $1.34 billion and a lease-back of
the land for $50 an acre for seven crop
cycles, the company said. The sugar
mill, refinery and citrus processing
facilities, railroads, office buildings,
equipment and Gilchrist County citrus nursery will remain the property
of U.S. Sugar.
Terms of the transaction initially
announced June 24, when negotiations still were under way, called for
10 / November 18, 2008

Milling & Baking News

a sales price of $1.75 billion and basically included all of the U.S. Sugar
facilities.
"After months of negotiations it
became clear that the best transaction
was for the state to buy the land and
for U.S. Sugar to keep the assets," said
Robert Coker, senior vice-president
of public affairs at U.S. Sugar. "At
the end of seven crops, we will either
continue to operate the facilities or
sell them based on the best interests
of our shareholders."
The final contract still must be approved by the U.S. Sugar board and
by the South Florida Water Management District (S.F.W.M.D.) governing
board. If approved the transaction
could be signed in early December,
the company said.
"The S.F.W.M.D. is able to purchase
all of the land necessary to proceed

with Everglades restoration at a cost
less than originally anticipated since
additional company assets are not included in the agreement," Mr. Coker
said. "The company is able to continue
farming and ensure that jobs are safeguarded for the next seven years."
The land purchase by S.F.W.M.D.
will help resolve restoration issues
for Lake Okeechobee, the Caloosahatchee and St. Lucie estuaries and
the Everglades, make land available
for critical water storage and treatment and allow remaining Everglades Agricultural Area farmers and
the Everglades to be sustainable well
into the future, the company said.
U.S. Sugar is the nation's largest
producer of sugar cane and refined
cane sugar, producing about 10% of
the total U.S. sugar supply, and one
of Florida's major orange and orange
products producers, with over three
million trees and output of more
than 120 million gallons of orange
juice annually. MBN
bakingbusiness.com / world-grain.com

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Milling & Baking News - November 18, 2008

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