Hostess: Bankrupt

Photo+of+one+of+the+most+popular+foods%2C+Twinkies%2C++from+Hostess+Brands.+

Photo of one of the most popular foods, Twinkies, from Hostess Brands.

Melissa Hollingshed, Staff Writer

November 29th 2012- The Iconic Brand Hostess – responsible for producing popular foods such as Twinkies and Wonder Bread- has lost a standoff between the bakers union, the Teamsters.

On November 16th Hostess Brands asked the federal bankruptcy court for permission to close its company placing the entire fault on the bakers strike. The bakers union, second largest union, held a strike because of a new contract imposed on them some time ago.  The bakers union also basically lost their cause too by losing their jobs. 18,500 workers will lose their jobs as a result of the close up.  Moreover, 33 bakeries and 565 distribution centers nationwide will shut down. (Chicago Tribune)

The judge decreed a bonus pay totaling up to $1.8 million for 19 top executives of the company (USA Today).  Hostess says this is needed to keep the executives on board for the stressful liquidation process, which is expected to take about a year.

Not only are people losing their jobs but Hostess Brands Inc. is selling their name and entire company to any available buyers. CEO Gregory Rayburn says there have been more than a hundred buyers willing to buy out the company now that it is bankrupt (USA Today). There has been an enormous interest to buy this historical company.

This is the second time Hostess Brands filed for bankruptcy dating back to December of 2011. The company caused the union to strike by failing to pay future pension benefits after August break union contracts.  On January 10, 2012 they filed for Chapter 11 bankruptcy officially. The company carries about $860 million in debt and only employs 19,000 people. (Chicago Sun-Times) The company’s original CEO, Brian Driscoll resigned from his position in March 2012.

Just about the day after news got to the public stores containing Twinkies, Wonder Bread, etc. were sold out. People know that this is one of America’s top snacks that has a wide reputaion. People will probably sell them on ebay for more money then they are actually worth. It is unknown if they will continue the production of these items so stock up while you can.