January 12, 2012
Steve Jakubowski quoted in Washington Post story, "Hostess Brands files for bankruptcy"
Steve Jakubowski, a partner in the firm's Restructuring and Insolvency Service Group, was quoted in a Washington Post article on January 12, 2012. The article, "Hostess Brands files for bankruptcy," said that the privately owned company filed for bankruptcy for the second time in the past decade. The company, which has 19,000 employees, will continue operating as it seeks to restructure.
From the article:
Pension funds have struggled since 2008 with the woes of the economy and stock markets.
But the bankruptcy filing also says that Hostess lost $250 million in the less than three years since it emerged from its previous bankruptcy. That means it would have lost money without any pension costs at all. A person familiar with the company’s bankruptcy filing said it has lost money in 30 of the past 37 quarters.
Steve Jakubowski, a Chicago bankruptcy attorney and blogger, noted that when the company emerged from bankruptcy last time it forecast 2011 revenue of $3.1 billion. But last year it had revenue of only $2.5 billion. In need of cash, its private-equity owner, Ripplewood Holdings, invested an additional $40 million last year and got hedge funds such as Silver Point Capital to lend more. The company’s debt load now totals $860 million.
“It shows how important it is to get the capital structure right the first time you come out of bankruptcy,” Jakubowski said. “With so much debt on your books, you have to have everything go right.”
To read the entire article, click here
Steve amplified on his comment with a post on his Bankruptcy Litigation Blog, the internet's first bankruptcy blog, which has received over 650,000 page views since its inception in 2005.
