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White Plains, NY - Its Official, Twinkie Maker Hostess To Close Down, Sell Brands

Published on: November 21, 2012 08:54 PM
By: AP
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Andy Wagar loads Twinkies, Ho-Hos and Cup Cakes into a van outside the Wonder Bakery Thrift Shop in Bellingham, Wash., Friday, Nov. 16, 2012. PHILIP A. DWYER/THE BELLINGHAM HERALD/AP Andy Wagar loads Twinkies, Ho-Hos and Cup Cakes into a van outside the Wonder Bakery Thrift Shop in Bellingham, Wash., Friday, Nov. 16, 2012. PHILIP A. DWYER/THE BELLINGHAM HERALD/AP

White Plains, NY - Twinkies, Ho Hos and Wonder Bread are up for sale now that a bankruptcy judge cleared the way for Hostess Brands Inc. to fire its 18,500 workers and wind down its operations.

A last-ditch effort to end a strike with Hostess’ bakers union failed Tuesday night and Judge Robert Drain on Wednesday approved the company’s request to shut down its business and sell the pieces to the highest bidder.

Hostess lawyers told Drain that they needed to begin the liquidation process quickly to take advantage of a surge in outside interest in its brands, which in addition to its namesake include Nature’s Pride, Dolly Madison and Drake’s.

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Hostess, based in Irving, Texas, also wanted to quickly shut down because it has been spending about $1 million a day in payroll without any income since it halted operations last week.

The company will send out termination notices to its employees on Wednesday, said CEO Gregory Rayburn.

“Those employees now need to look for work,” he said.

Hostess said it plans to retain about 3,200 employees to help with the initial phase of the wind down. The entire process should take about a year.

The snack maker’s demise was years in the making. Management missteps, rising labor costs and changing tastes culminated in a crippling strike by The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union.

Hostess shut down its plants late last week after it said the strike by the bakery union hurt its ability to maintain normal production. The liquidation means the closure of 33 bakeries, 565 distribution centers, about 5,500 delivery routes and 570 bakery outlet stores, the company said.

Management had said Hostess was already operating on razor-thin margins and that the strike was the final blow. The union, meanwhile, pointed to the steep raises executives were given last year, as the company was spiraling down toward bankruptcy.

“This is a very hostile situation and in some respects rightfully so,” Rayburn said.

A banker working for Hostess said at Wednesday’s hearing that brands typically fetch the equivalent of about a year’s sales when they are sold off in liquidation. He noted Hostess’ sales are in the range of $2.3 billion to $2.4 billion a year.

The banker, Joshua Scherer of Perella Weinberg Partners, said that interest in Hostess’ brands has come from companies ranging from regional bakers to major national retailers that have long sold Hostess products.

“This is a once-in-a-lifetime opportunity to get iconic brands separate from their legacy operators,” Scherer said during the hearing in U.S. Bankruptcy Court in the Southern District of New York in White Plains, N.Y.

The company’s initial announcement on Friday that it would move to liquidate its business prompted people across the U.S. to rush to stores and stock up on their favorite Hostess treats. Many businesses reported selling out of Twinkies within hours and the spongy yellow cakes turned up for sale online for hundreds of dollars.

Hostess, founded in 1930, filed for Chapter 11 bankruptcy protection in January for the second time in less than a decade. Its predecessor company, Interstate Bakeries, sought bankruptcy protection in 2004 and changed its name to Hostess after emerging in 2009.


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1

 Nov 21, 2012 at 09:54 PM TexasJew Says:

Boruch Dayan Haemes.
Is life worth living?????????

2

 Nov 21, 2012 at 10:37 PM monalisa Says:

I have absolutely no rachmones for the workers. They let the unions destroy a viable company. What goes around, comes around. Meanwhile, I understand the union leaders will do very well out of this debacle. Sadly, I don't think the single moms & older workers will benefit too much. Good luck with all your holiday plans!

3

 Nov 21, 2012 at 10:49 PM JerusalamiKugel Says:

One time Twinkies were Kosher- Since then it was all downhill. Rabbi Hechsher took all the Profits-never recouped from it

4

 Nov 22, 2012 at 12:20 AM shredready Says:

Reply to #2  
monalisa Says:

I have absolutely no rachmones for the workers. They let the unions destroy a viable company. What goes around, comes around. Meanwhile, I understand the union leaders will do very well out of this debacle. Sadly, I don't think the single moms & older workers will benefit too much. Good luck with all your holiday plans!

not the workers the buy out guy ladened this company with massive debt then claiming they cannot pay the workers. However, at the same time giving the executives millions in bonuses.

why should they get a bonus they obviously did a lousy job

5

 Nov 22, 2012 at 12:20 AM sasregener Says:

They are closing up because the IDF wanted to draft chareidim.....go figure

6

 Nov 22, 2012 at 12:21 AM lazerx Says:

Are these things kosher? They were not when I was a kid...

7

 Nov 22, 2012 at 09:04 AM DACON9 Says:

#3 / RABBIS TOOK THE PROFITS?
I think you ate to much jimmy carter peanuts.
Rabbis do not receive nor control monies and are paid either on per piece production or a flat fee based on different factors. I never saw 'hostess kosher' despite the claim from a commentor here. If it was kosher the sales from the kosher consumer would substantially increase.
How about the high excessively high salaries to dump a bag of flour in a mixing bin?
How about excesssive union interference in every aspect of operations coupled with normal goverment intrusions?
how about the economy slow down?

AND YOU PICK ON RABBIS.....?
what is the name of your mosque so I can tell your imam.

8

 Nov 22, 2012 at 09:24 AM Anonymous Says:

Reply to #4  
shredready Says:

not the workers the buy out guy ladened this company with massive debt then claiming they cannot pay the workers. However, at the same time giving the executives millions in bonuses.

why should they get a bonus they obviously did a lousy job

The company was targeted by venture (vulture) capitalists. They look for companies that have been around for a long time and have large cash reserves for retirees. They then go after the unions while, at the same time, destroying the company, laying off the workers (starting with the oldest ones), and stealing the pension fund.

By the way, Nabisco employs union workers and the company is doing just fine.

9

 Nov 22, 2012 at 10:31 AM 5TResident Says:

Nothing from Hostess has been kosher since I was a kid. I remember going shopping with my mother when I was about 7 (in 1972) and her telling me that I couldn't have Twinkies because Hostess was traif.

10

 Nov 22, 2012 at 07:01 PM peretz2 Says:

Reply to #9  
5TResident Says:

Nothing from Hostess has been kosher since I was a kid. I remember going shopping with my mother when I was about 7 (in 1972) and her telling me that I couldn't have Twinkies because Hostess was traif.

I think they got one of the shvacher hechshers once they replaced animal lard with vegetable shortening 20 years ago

11

 Nov 22, 2012 at 07:12 PM A Says:

Reply to #9  
5TResident Says:

Nothing from Hostess has been kosher since I was a kid. I remember going shopping with my mother when I was about 7 (in 1972) and her telling me that I couldn't have Twinkies because Hostess was traif.

But Drake's has been kosher for as long as I remember..those Drake's coffee cakes, nothing like 'em.

12

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