Friendly's Creditors, PE Owner Settle Credit Bid Fight

Law360, Wilmington (December 15, 2011, 6:10 PM EST) -- Bankrupt Friendly Ice Cream Corp. and its owner Sun Capital Partners LLC minted a deal with unsecured creditors Thursday that clears the private equity firm to bid $50 million in debt toward retaining control of the family restaurant chain.

The settlement averted a showdown Thursday in Delaware bankruptcy court with unsecured creditors and Pension Benefit Guaranty Corp., which held that a $267 million note owed to the private equity firm by Friendly was actually a capital contribution that should be considered equity and, therefore, not suitable...
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