November 16, 2012
News Release
Irving, TX – November 16, 2012 – Hostess Brands Inc. today announced that it is winding down operations and has filed a motion with the U.S. Bankruptcy Court seeking permission to close its business and sell its assets, including its iconic brands and facilities. Bakery operations have been suspended at all plants. Delivery of products will continue and Hostess Brands retail stores will remain open for several days in order to sell already-baked products.
The Board of Directors authorized the wind down of Hostess Brands to preserve and maximize the value of the estate after one of the Company’s largest unions, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM), initiated a nationwide strike that crippled the Company’s ability to produce and deliver products at multiple facilities.
On Nov. 12, Hostess Brands permanently closed three plants as a result of the work stoppage. On Nov. 14, the Company announced it would be forced to liquidate if sufficient employees did not return to work to restore normal operations by 5 p.m., EST p.m., Nov. 15. The Company determined on the night of Nov. 15 that an insufficient number of employees had returned to work to enable the restoration of normal operations.
The BCTGM in September rejected a last, best and final offer from Hostess Brands designed to lower costs so that the Company could attract new financing and emerge from Chapter 11. Hostess Brands then received Court authority on Oct. 3 to unilaterally impose changes to the BCTGM’s collective bargaining agreements.
Hostess Brands is unprofitable under its current cost structure, much of which is determined by union wages and pension costs. The offer to the BCTGM included wage, benefit and work rule concessions but also gave Hostess Brands’ 12 unions a 25 percent ownership stake in the company, representation on its Board of Directors and $100 million in reorganized Hostess Brands’ debt.
“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 will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders.â€
In addition to dozens of baking and distribution facilities around the country, Hostess Brands will sell its popular brands, including Hostess®, Drakes® and Dolly Madison®, which make iconic cake products such as Twinkies®, CupCakes, Ding Dongs®, Ho Ho’s®, Sno Balls® and Donettes®. Bread brands to be sold include Wonder®, Nature’s Pride ®, Merita®, Home Pride®, Butternut®, and Beefsteak®, among others.
The wind down means the closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores throughout the United States.
The Company said its debtor-in-possession lenders have agreed to allow the Company to continue to have access to the $75 million financing facility put in place at the start of the bankruptcy cases to fund the sale and wind down process, subject to U.S. Bankruptcy Court approval.
The Company’s motion asks the Court for authority to continue to pay employees whose services are required during the wind-down period.
For employees whose jobs will be eliminated, additional information can be found at www.hostessbrands.info. The website also contains information for customers and vendors. Most employees who lose their jobs should be eligible for government-provided unemployment benefits.
Source: Hostessstrikeinfo.com
Hostess is bankrupt……again
http://management.fortune.cnn.com/2012/07/26/hostess-twinkies-bankrupt/
The rest of the story.
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Fox is reporting the out of work will number 18,500. Either way, all I can say is they did it to themselves.
Hopefully someone buys the assets at auction and puts people to work who appreciate a job that can pay ANYTHING AT ALL in this economy.
The actual number will most certainly grow even higher as people at other companies who had jobs to manage Hostess accounts join the casualties. It has been written that one manufacturing job supports two others. If that is the case the number will eventually rise to 50,000 or so.
Those “creditors” are those other companies whose payrolls were counting on that money.
Makes it kinda hard for the Teamsters to argue they are “pro labor”… Truth is, they are just “pro themselves” and they don’t give a damn about the success of the host company (no pun intended” their blood-sucking, parasitic, “what’s in it for ME” mentality latches onto. It’s like watching a mighty buffalo being felled by a common tapeworm from the inside.
Did you even read anything about the bankrupcy or the strike or are you just running you mouth again.
I’ve read several articles this morning and was already aware they were in bankruptcy even before this most recent strike.
How about you point out where you think I’ve gone wrong in my assessment of the situation and we can go from there.
The facts as I see them are that the Teamsters union mainly, but also a patchwork of other union entities, caused this business to fail because over time they demanded far too much of the company in terms of long term pensions and wages that put it in an noncompetitive position in the marketplace. They had tried to restructure to loosen some of the constraints so they could continue in business, but the greedy employees went on another strike and made that impossible. Now they will pick the bones of the company bare after any assets are auctioned off, fighting with the hedge funds and other creditors, to get at what little is left. After that, all of those 18,500 will go on unemployment.
Am I missing something?
The Teamsters accepted concessions and were working with the company. This is not the Teamsters. http://www.huffingtonpost.com/2012/11/16/hostess-liquidation-teamsters-bakers-union_n_2145851.html
Everything published made a lot of sense. However,
what about this? what if you wrote a catchier post title?
I am not suggesting your content is not solid.
, however suppose you added a post title that grabbed people’s attention? I mean Hostess Brands to Close, 16,500 Jobs Face Elimination, 850 are Hoosiers | City-County Observer is a little vanilla. You might glance at Yahoo’s home page and note
how they create news headlines to get people interested.
You might add a related video or a related picture or two to grab readers excited about everything’ve got to say. Just my opinion, it would bring your website a little bit more interesting.
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