Judge Suggests Mediation to Save Hostess; Sides Agree to Talk.

WSJ ^

[Perdogg]

Dow Jones is reporting that a bankruptcy judge is urging mediation to save Hostess from liquidation. WSJ will have more to come as it comes out of the courtroom.

Here’s an update from bankruptcy reporters Jacqueline Palank and Rachel Feintzeig

A bankruptcy judge Monday asked whether he should preside over mediation between Hostess Brands Inc. and its striking union to avoid pulling the plug on the baker of Ho Hos, Twinkies and Wonder Bread.

[Doogle]

[Da Coyote]

If I had the choice between my beloved Twinkies and chocolate cupcakes becoming extinct or the Obamadork/felon/human excrement never being seen again - ‘twouldn’t be long before I could announce a decision.

[GeronL]

The unions do not want to compromise at all

economics won’t either

[GSWarrior]

How many Snowballs can you fit into your mouth at once?

[Jean S]

Can the judge force them to “mediate” with the union? That’s my impression.

[O6ret]

Haven’t they already been though mediation....the result of which the union rejected?

[4yearlurker]

An unopened box of 10 Twinkies is selling for an average price on Ebay for about 30 bucks. That's with a singles pack of snowballs as a kicker.

[NVDave]

Bankruptcy judges have a pretty wide swath of powers in the interests of the creditors and owners of a company.

The judge was able to impose the deal on the unions in the first place, which is why the Baker’s union went on strike. The Teamsters took the deal, the bakers balked.

What the judge cannot do is force the owners or investors to toss in more money than they already have (at least to my knowledge of BK law).

Here, the judge can try to mediate a deal under the notion that by so doing, there’s a chance at preserving investor capital and creditor principle.

[DoughtyOne]

This is hilarious.

[Jean S]

Thanks Dave.

[treetopsandroofs]

Haven’t seen any “Will Work for Twinkies” signs.....

Guess it would be too ambiguous, like “Will Work for Fairies”?

[E. Pluribus Unum]

Sounds like the judge wants to force them to stay in business despite the fact that they will be operating at a loss.

Ignorance of basic accounting principles is bliss.

For the ignorant.

[COBOL2Java]

They wanna work for Barney Frank?

[exit82]

They have been mediating since April.

Looks like Hostess is giving them the heave-Ho-Ho.

[Revolting cat!]

So, what’s Twinkie’s Defense?

[stephenjohnbanker]

” Bakery, Confectionery, Tobacco Workers and Grain Millers International union”

Good Lord!!

Are Hookers covered in this union too ?

[Vaduz]

Unions tap made judge.....

[DoughtyOne]

Well my take on things is that when you join a union your status changes, so this is rather academic for me. ;^)

[Red_Devil 232]

Well at least we still gots RC Cola and MoonPies for lunch!

[Dr. Sivana]

The owner of a company I used to work for filed for bankruptcy, and as it was the second time, the creditors were ultimately trying to force serious changes. It turned into a heave-ho match with the owner unwilling to make any significant concessions, and the creditors unwilling to lose all of their money.

The judge wanted to them to work things out to avoid a Trustee. Well, it didn't happen, and an extra $2 million was wasted in the court room of a small company with most small time creeditors who could have used it. At times, lawyers would spend the better part of a billable hour in court arguing over which fund pays for the lawyers fees. It was right out of Dickens' Bleak House.

In the end, the result was the same as would have been had the judge been able to realize that one side was completely intractable, and the other was largely intractable. This cost the business three years and two million dollars, neither of which it really had, and everyone was the poorer for it.

[stephenjohnbanker]

: )

[NY.SS-Bar9]

and everyone was the poorer for it.

Except the lawyers.

[wrencher]

“and everyone was the poorer for it.”

Not everyone, the lawyers for both sides were probably toasting each other during the feasts.

[supremedoctrine]

Which only underscores the imperishable truth that “It’s all about the lawyers” (followed by the Courts and the Judges).

[RedMDer]

FReepers are the greatest!! Woo hoo!! And we’re now working on the last $8k!! We can do this.

[ArmstedFragg]

I once sat through a public meeting where an organization known as “The Association of the Gay, Lesbian, Bisexual, Transgendered, and Confused” made an appearance. One wag commented that someone who was the first four would definitely be the fifth.

[stephenjohnbanker]

No doubt : )

[cherry]

I can't believe that there are so many freepers into store bought sugary fatty creations.....doesn't any body bake at home anymore?

but to the point....some workers have come out publicly and said that they hope the company goes bankrupt because they don't want to work for them anymore...

[rfp1234]

Medication? Meditation? Oh, never mind.

[Ron H.]

The unions do not want to compromise at all

The union backed itself into a corner and cannot be seen as compromising as it would likely be seen as backing down and losing face, IMHO.

[GeronL]

Hostess would have been half owned by the workers under the proposed contract.

They don’t want to work for themselves either.

[GeronL]

Bleak Twinkies

[matt04]

The Teamsters compromised and took a 8% pay cut. Hostess wanted the same thing of the bakers union. They refused to budge multiple times. I don’t see that changing.

[elkfersupper]

The lawyers get paid first in any bankruptcy.

It's like gravity. It's the LAW.

[elkfersupper]

Well at least we still gots RC Cola and MoonPies for lunch!

In 'Merica, anyway.

The rest of the U.S. may just have to suffer.

[onyx]

We sure need some here.
FReepathon Day 50!

[Uncle Chip]

Sell it — too much featherbedding in the current economic model. A new buyer will pay more for the assets if it doesn’t have to deal with the unions.

[FR_addict]

Not good to have the teamsters union mad at you.

The bakers union might want to reconsider.

[supremedoctrine]

btt

[supremedoctrine]

btt

[supremedoctrine]

btt

[BobNative]

The Bakers Union thought that Hostess was bluffing. The Union was wrong and they will now beg to go back to work.

If I could make the rules, I would encourage Hostess to take the workers back, WITHOUT the Union!

[Daryl L.Hunter]

some workers have come out publicly and said that they hope the company goes bankrupt because they don't want to work for them anymore...

Oh, with Obama as president they can probably collect unemployment until the Americans are re-elected again.

The Hole Picture

[ksen]

The unions do not want to compromise at all

economics won’t either

The unions have compromised quite a bit over the last few years. How about the lenders compromise a bit on the $700 million in debt and their fees?

[matt04]

Particularly when the Teamsters was the largest union involved. The bakers union was smaller.

[GeronL]

don’t borrow money, if you do then try to get a better deal BEFORE you take a loan.

[Iron Munro]

The unions have compromised quite a bit over the last few years.
How about the lenders compromise a bit on the $700 million in debt and their fees?

Or, sympathetic parties could offer to take their savings, use it to buy some of that debt, then tell Hostess they will eat the debt to help the company out.

That would embarrass those greedy capitalists, wouldn't it?

/s

[ksen]

don’t borrow money, if you do then try to get a better deal BEFORE you take a loan.

It wasn't the unions that borrowed money.

And it looks like Sun Capital wants to buy Hostess and keep the existing plants and workers operating.

The co-CEO for Sun Capital said:

"I think that we could offer a slightly better, more labor-friendly deal than what was on the table last week," says Sun co-CEO Marc Leder, in an interview with Fortune. "We also think that one point the unions have made is that there hasn't been a great amount of reinvestment in the business. We've found that investing new capital into companies like this can be very positive for brand, people and profitability... We would look to invest in newer, more modern, manufacturing assets that would enable the company to become more productive and to innovate."

[Rebelbase]

If hostess caves to the union I can see them getting the JC Penny treatment by consumers.