Former Hostess Brands repays more than $732 million of debt in full

By Caroline Salls

Pittsburgh, June 27 – Old HB, Inc., formerly Hostess Brands, Inc., has paid a majority of its pre-bankruptcy debt in full from the proceeds of the wind down of its businesses and asset sales, according to a status report filed Friday with the U.S. Bankruptcy Court for the Southern District of New York.

Specifically, the company said it fully paid its pre-bankruptcy asset-based lending facility, under which more than $50 million was owed when Hostess filed bankruptcy; its up to $75 million debtor-in-possession facility; a $30 million post-bankruptcy Hilco loan; more than $405 million in first-lien term loan debt; and more than $172 million of third-lien term loan debt.

In addition, Old HB said it has paid $61.7 million on fourth-lien secured notes, leaving $169.1 million in outstanding principal amount on those notes.

As of June 13, Old HB said it had $29.5 million in cash in its accounts, of which $4.2 million is segregated for specific purposes.

According to the status report, the company believes that it is highly unlikely that it will ultimately be able to pay the fourth-lien secured notes in full.

As a result, Old HB said it does not expect to have any funds available for distribution to administrative creditors whose claims are not included in the liquidation budget or to holders of pre-bankruptcy priority claims or pre-bankruptcy unsecured claims.

Old HB said it expects to file a motion “at some point before the end of 2014” for the transfer of its remaining assets of value to an entity to be created at the direction of the fourth-lien indenture trustee.

After that process is complete, the company said it would file motions to address the final issues to be addressed in the bankruptcy cases and a motion seeking dismissal of the Chapter 11 cases.

Hostess Brands, an Irving, Texas-based operator of regional bakeries, filed for bankruptcy on Jan. 11, 2012. Its Chapter 11 case number is 12-22052.

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