Mrs. Fields, the sweet old woman with the cookies, filed for Chapter 11 bankruptcy protection today because flour and milk have become too expensive. Besides, you people aren’t splurging on luxuries likes sweets or meals out anyway thanks to the ongoing non-recession inflation thing that also killed off Bennigan’s.
Under a prepackaged bankruptcy, Mrs. Fields would file for Chapter 11 protection having already developed a plan to repay its creditors and exit from bankruptcy. Mrs. Fields’s restructuring plan calls for its noteholders to exchange their $195.7 million in notes for $90 million in cash, $50 million in new senior secured notes and 87.5% of the company’s new common stock. The noteholders are expected to recover 86.5% on their claims.
The Mrs. Fields brand was born in 1977, when Debbi Fields opened up her first cookie shop in Palo Alto, Calif. The company turned to franchising in 1990 and has nearly 390 locations in the U.S. and 80 internationally, according to its Web site, plus hundreds of TCBY stores.
The company, however, has struggled with a heavy debt load and has racked up losses in recent months. Mrs. Fields posted a net loss of about $10.7 million for the quarter ended June 28.
Guess the scent of cookies isn’t enough to convince consumers to splurge after all.