January 23, 2004

Jobs Safe

Bagel plant 'unchanged' by Aurora Foods bankruptcy plan

ST. LOUIS -- Aurora Foods Inc., producer of Lender's Bagels and other foods, said Thursday the Mattoon bagel plant will not be affected by its bankruptcy plan.

Aurora will close its Missouri operations under its bankruptcy plan to be folded into Pinnacle Foods Holding Corp., the maker of Vlasic pickles and Swanson frozen foods.

Aurora filed a Chapter 11 bankruptcy plan last month as part of its pending hookup with Pinnacle Foods. The company will shutter its St. Louis headquarters and a neighboring product-development center by the end of March, leaving most of its 170 corporate workers jobless.

Aurora 's plants in Erie , Pa. , Jackson , Tenn. , and Mattoon and St. Elmo are to remain running after the merger, their work forces "substantially unchanged," according to the Associated Press.

The Mattoon plant makes about 3.5 million bagels a day. The facility employs about 400 after a major expansion about 10 years ago that nearly doubled the bagel-making capacity.

Aurora bought the Mattoon bagel plant in 1999 from the Kellogg Co. Kraft was the original producer of Lender's Bagels when the Mattoon facility on West Illinois Route 121 began making the frozen bagels in 1986. Kraft sold the plant to Kellogg in 1996.  

Aurora also expects to consolidate the combined company's corporate functions at Pinnacle Foods' headquarters in the New Jersey cities of Mountain Lakes and Cherry Hill . Aurora has said it expects the reorganization and deal involving Pinnacle, announced in July, to be completed by March 31, pending court and regulatory approvals. A confirmation hearing on Aurora 's bankruptcy plan is set for Feb.17.  

Aurora has said the bankruptcy plan calls for all vendors and trade creditors to be paid in full, as well as Aurora 's senior lenders under the company's existing credit facility. Some bondholders would be paid in full in cash, while others would get 50 cents on the dollar in cash or 53 cents on the dollar in equity in the combined company.  

Certain holders of Aurora 's notes will own up to 42 percent of the equity of the combined company, while existing common and preferred stockholders will get nothing.

Aurora also produces and markets syrups under the Log Cabin, Mrs. Butterworth's and Country Kitchen brands, as well as Van de Kamp's and Mrs. Paul's frozen seafood, Duncan Hines baking mixes, Aunt Jemima frozen break- fast products, and Celeste frozen pizzas.

Aurora Foods has about 2,000 employees.