Mrs. Fields noteholders extend exchange offer launch deadline, confirm restructuring support

By Caroline Salls

Pittsburgh, July 15 - A group of Mrs. Fields Famous Brands, LLC's noteholders has agreed to extend the target date for launching a proposed exchange offer to July 21 from June 30, according to an 8-K filed with the Securities and Exchange Commission.

According to the 8-K, the exchange offer start date will also be automatically extended to July 21 if the parties are working in good faith to implement the restructuring.

The group of investors holding the company's 9% and 11½% senior secured notes due 2011 also reconfirmed its support for Mrs. Fields' proposed restructuring.

The related restructuring term sheet amendment also establishes additional milestones that would need to be met by Mrs. Fields for the committee to continue to support the restructuring.

As previously reported, the noteholders who agreed to support Mrs. Fields' proposed restructuring told the company it was reserving its right to terminate its obligations under the restructuring term sheet when the company announced that it did not meet the June 30 deadline for launching its exchange offer.

Mrs. Fields entered into a binding restructuring term sheet on June 2 with some unaffiliated investors holding its 9% and 11½% senior secured notes due 2011, under which the company agreed to offer to exchange the notes for cash, new debt and new equity.

On June 3, some members of a committee of noteholders, including the investors who are parties to the restructuring term sheet, agreed to support the restructuring, provided that the committee members and the company enter into definitive documentation regarding the exchange offer that would allow it to begin by June 30.

However, the exchange offer was not launched on June 30, but was expected to begin within the next few weeks instead.

Although the company said it was working with the committee to complete the necessary documentation, the committee members have reserved their right to terminate their obligations because Mrs. Fields did not meet the June 30 deadline.

In addition, Stephen Russo terminated his position as a director and the president and chief executive officer of Mrs. Fields Famous Brands on July 10.

The company said its board of managers has not yet met to review Russo's notice of termination and has not decided whether to attempt to fill the position of president or CEO on either an interim or permanent basis.

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.

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