Interstate Bakeries requests equity, convertible restrictions to preserve tax credits

By Caroline Salls

Pittsburgh, Feb. 28 - Interstate Bakeries Corp. asked the U.S. Bankruptcy Court for the Western District of Missouri to restrict trading in the company's equity securities by stockholders holding 2.04 million shares or more and to require notice of stock holdings, according to a company news release.

In addition, Interstate has asked the court to restrict the ability of convertible noteholders to convert the notes and acquire stock and to require convertible noteholders to provide notice of their holdings to the company.

An interim hearing on the motion will be held March 3.

The company said the requested restrictions are intended to preserve tax net operating loss (NOL) carry-forwards that may be used to offset taxable income it might generate in future tax years.

Under the U.S. tax code, transfers by shareholders with equity holdings of 5% or more may start a change in ownership that would limit the amount of a company's income that can be offset for tax purposes.

Interstate estimated about $34 million in NOLs for fiscal 2005 and about $56 million of NOLs for the first eight periods of fiscal 2006.

The Kansas City, Mo., bakery operator filed for Chapter 11 protection on Sept. 22, 2004. Its case number is 04-45814.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.