November 28, 2012

Twinkie Maker Hostess Goes Out of Business


Hostess Brands, Inc., the maker of popular iconic baked goods such as Twinkie and Ding Dongs, also the producer of Wonder Bread for the past 90 years has decided to shut down operations and go out of business after failed talks with the Confectionery, Tobacco Workers and Grain Millers International Union.  Hostess filed for Chapter 11 Bankruptcy earlier this year after incurring crushing debt of approximately $860 million dollars owed to approximately 100,000 creditors.  Part of their strategy within their bankruptcy was to re-organize the business by attempting to amend their labor contracts in order to be a competitive company.  Unfortunately for  Hostess they were not able to come to an agreement with the labor union even with the mediation by New York Bankruptcy Judge Robert Drain.  There are approximately 18,500 jobs that will be lost with the shut down of the baked goods product lines.  It is expected that certain popular product lines will be sold to new owners and the proceeds will become part of Hostess’ bankruptcy estate and used presumably to pay creditors.

Posted In: Bankruptcy