Mrs. Fields granted interim use of cash collateral; other first-day motions approved

By Caroline Salls

Pittsburgh, Aug. 27 - Mrs. Fields Original Cookies, Inc. received interim court approval to use cash collateral to fund its operations, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Delaware.

The final hearing is scheduled for Sept. 22.

As previously reported, the company requested court approval to use the cash collateral through Oct. 18 to provide enough working capital to operate its businesses throughout the reorganization process.

According to a company news release, Mrs. Fields was also granted court approval of its other "first-day" motions, which will allow the company to continue to pay employee salaries, wages and benefit programs; pay vendors in the normal course of business; and maintain uninterrupted delivery of products and services to its franchisees and customers.

The company said it is also seeking a $10 million credit line that will be used in conjunction with cash flows from normal operations to support all of its operations and working capital needs upon emergence from Chapter 11.

"Receiving approval so quickly places Mrs. Fields in the best possible position as we move toward completing our restructuring," interim co-chief executive officer Michael Ward said in the release.

"We fully expect to receive court approval of our reorganization plan at the scheduled Oct. 2, 2008 confirmation hearing and to emerge from these proceedings a stronger, more viable company with a drastically improved balance sheet.

"With our first-day motions behind us, we can now focus our attention on finalizing post-emergence plans leveraging our new financing and equity structures to drive results for our franchising, gifting, and branded retail businesses."

Mrs. Fields, based in Salt Lake City, has 2,100 franchised and licensed concept locations worldwide. Its subsidiaries include franchisors of the Mrs. Fields Cookies and TCBY franchise systems. The company filed for bankruptcy on Aug. 24, and its Chapter 11 case number is 08-11953.

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