Financing is cleared for Interstate

Interstate Bakeries Corp. won court approval of a financing deal potentially funding its reorganization and establishing a process to let rival companies bid for the maker of Wonder Bread and Twinkies.

U.S. Bankruptcy Judge Jerry W. Venters in Kansas City, Mo., approved the proposal to name an affiliate of hedge fund manager Silver Point Capital as the so-called stalking-horse bidder. Silver Point is offering as much as $400 million in funding.

The approval sets up a Jan. 22 auction to let other investors bid to replace Silver Point’s affiliate as the primary financing source to reorganize Interstate.