A bankruptcy judge said Wednesday that Salt Lake City-based Mrs. Fields Original Cookies Inc. can continue to pay workers and vendors in the normal course of business as the company's bankruptcy proceeds.
The approval was part of the company's first-day motions, which a company makes near the start of its bankruptcy to get court approval of basic business expenditures such as employee wages and payment of goods and services from vendors. The company now has access to $90 million to fund operations and will seek a $10 million credit line.
Mrs. Fields filed for Chapter 11 bankruptcy protection on Aug. 24 in U.S. Bankruptcy Court in Delaware, with a prepackaged plan, which meant it entered court protection with a proposed reorganization plan already in place.
The company said Wednesday that it expects the court to consider its reorganization plan at an Oct. 2 confirmation hearing.
At the time of its filing, the company cited "aggressive competition" in its franchising business and said there had been a decline in customer traffic at shopping malls. Many restaurant companies have suffered declining sales as consumers cut back on discretionary spending because of high gas prices.
Mrs. Fields changed its product lineup in recent years, but it wasn't enough to stay out of Chapter 11.
The cookie company was started in 1996 when Capricorn Holdings bought Mrs. Fields Inc. and The Original Cookie Co. The company expanded through acquisitions of chains such as TCBY, Pretzel Time, and Great American Cookie.