Hostess Seeks Liquidation; Buyers Seen

IRVING, Texas — Hostess Brands here, maker of Twinkies, Wonder Bread, Ding Dongs and Ho Ho’s, among other baked goods brands, said Friday that it has suspended operations and would seek to liquidate its assets.

The company attributed the move to a nationwide strike by one of its largest unions, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union.

Delivery of products will continue and Hostess Brands retail stores will remain open for several days  to sell already-baked products, the company said in a statement. According to some reports, if the company does succeed in getting bankruptcy court approval to liquidate, buyers are likely to emerge for its iconic brands. Among potential interested parties, according to an NBC report, are Bimbo Bakeries, Flowers Foods, McKee Foods, J&J Snack Foods, Pinnacle Brands and ConAgra.

Hostess had operated 36 bakery plants around the country, three of which had recently been shuttered.

Hostess Brands Information: Customer FAQ [2]

Hostess filed bankruptcy in January of this year — after a previous bankruptcy reorganization in 2004 — and has battled with its unions over what it described as burdensome wages, benefits and pensions. The Bakery union in September rejected a “last, best and final” offer from Hostess Brands, which then received court authority on Oct. 3 to unilaterally impose changes to the union’s collective bargaining agreements.

“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” said Gregory F. Rayburn, chief executive officer, Hostess Brands. “Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders.”

Read more: Hostess Files Bankruptcy [3]

The Bakery union could not be reached for comment. In a prepared statement, the Teamsters Union, which is Hostess Brands’ largest organized labor group, blamed the situation in part on “mismanagement” by the company.

“The company has clearly been mismanaged for quite some time,” said Ken Hall, general secretary-treasurer at the Teamsters Union. “However, the workers should not suffer because of poor management and therefore, the Teamsters Union tried everything in its power during the company's most recent financial difficulties to shape an outcome that would put Hostess on strong footing to be viable and preserve jobs. Unfortunately, the company's operating and financial problems were so severe that it required steep concessions from a variety of stakeholders but not all stakeholders were willing to be constructive.”

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