There’s hardly anyone I know who doesn’t love the crunch of Vlasic pickles, but, as I learned earlier this month, Vlasic itself is in quite a pickle. Back in January of this year, Vlasic turned to a Delaware bankruptcy court for Chapter 11 bankruptcy protection against creditors while the company looked for a buyer to bail it out of financial troubles.

Now the Vlasic company has filed a plan with the court based on a buyout of Vlasic’s assets by a firm named Hicks, Muse, Tate and Furst, Inc. In an earlier bankruptcy blog, Should You Renew Your Vows With Your Creditor?, I explained that one of the functions of a Chapter 13 corporate bankruptcy filing is to “buy time” to seek a purchaser for company assets. Under the plan in this case, most of Vlasic’s assets have been sold to Hicks, Muse, Tate, and Furst, Inc., raising $370 million. The most familiar brands were included, – the pickle line, Open Pit barbecue sauce products, and North American frozen foods. These proceeds will be combined with proceeds from several smaller asset sales, the combined cash will be used to pay creditors. Since there is still not enough to pay all the creditors in full, secured creditors will be first in line to receive payment. Debts to unsecured creditors will be only partially repaid, and, sadly, there is going to be nothing left for the shareholders.

So that you can make sense out of this story, I’ll remind you that, in a business bankruptcy, unlike the case with a personal bankruptcy, the court does not have the power to discharge debts. Therefore, all available assets must be sold to satisfy creditors, with the secured creditors (who lent money to the company based on tangible assets such as real estate, equipment, or supplies) being first in line, followed by the unsecured creditors. As I brought out in an earlier blog, Michael Vick Files Chapter 11 Bankruptcy, the underlying principle in a personal bankruptcy case is to offer people a chance at a fresh financial start. In a business bankruptcy, by contrast, the purpose is to help the filing company execute a plan to fairly repay its creditors. I can’t help wondering, though: Will pickles under any other name be as crunchy?