Hostess Brands Preparing for Chapter 11 Filing

WSJ ^ | 1-10-2011 | Mike Spector

[Dysart]

Hostess Brands Inc. is preparing to file for Chapter 11 bankruptcy protection as soon as this week, said people familiar with the matter, a move that would mark the second significant court restructuring for the Twinkie and Wonder Bread baker in the past several years.

The privately held Irving, Texas, company, which employs roughly 19,000 people and carries more than $860 million in debt, has been facing a cash squeeze amid high labor costs and rising prices for sugar, flour and other ingredients, according to people familiar with the matter. Those costs together have proved higher than the company's roughly $2.5 billion in annual sales, creating losses and cash shortfalls, they said.

Hostess also currently owes more than $50 million to vendors, which have been demanding payments on shortened timeframes after delivering goods because of Hostess's financial condition, one of the people said.

Hostess's filing would mark what's known as a "Chapter 22" in restructuring circles, since the company had already sought bankruptcy protection once before. Hostess, before called Interstate Bakeries Corp., slashed debt and costs during a four-year stint in bankruptcy court that began in 2004. The company has struggled since emerging from bankruptcy proceedings in February 2009.

The company's private-equity owner, Ripplewood Holdings, invested $40 million in Hostess last year to no avail. Hedge funds Monarch Alternative Capital, Silver Point Capital and others loaned the company $20 million late last year, but Hostess continues to have cash problems.

[Dysart]

I suppose it's possible that people are turning away from Hostess products that some may consider junk food and opting for more nutritionally robust sustenance.

Nah. Obama's fault, definitely.

[Lovely-Day-For-A-Guinness]

I used to work with a guy whose father invented a test to determine whether there was enough cream filling inserted into a Twinkie (er, what I just typed sounds perverted).

An electric current was passed through it and measured against a standard. If it failed, the offending Twinkie was doomed to Twinkie hell or the outlet store for misfit bakery products.

Concerned parents everywhere surely must be wondering what's going to help build strong bodies in 12 ways when WonderBread goes extinct?

[Doogle]

"you woke me to tell me .....????...huh?...the cupcakes too?"

[Nachoman]

The impact on software development could be devastating.

[Cowgirl of Justice]

“Word is he married the Ho-Ho.”

So big she had to be named twice.

[tumblindice]

A little girl was at the barber shop with her father.
She was standing next to the barber chair while her dad got his hair cut, and she was eating one of those magnificent golden yellow, creme-filled sponge snack cakes.

She was standing a little close and the barber said, “Sweetheart you’re gonna get hair on your twinkie.”
She replied, “I know. I’m gonna get boobies too.”

[USMCPOP]

“An electric current was passed through it and measured against a standard.”

I’m shocked. Stunned. That’s like a Twinkie lobotomy. No wonder they just sit there on the shelves and get stale.

[omega4179]

Recovery.

[Rome2000]

WONDER BREAD

Everyone says it tastes good/It killed off my neighborhood/ You don’t know what it’s made of/it lasts forever!

http://www.reverbnation.com/artist/song_details/6641413

[cicero2k]

The economy is picking up steam, doing great, just don’t ask those who work for: Sears/Kmart Macy’s Hostess Kodak

Meanwhile Starbucks continues to roll.

I think the Hostess demise is an indicator of demographics and companies that fail to keep up.

The snack food eating demo is more hip and more urban.

There's less cruising, and more walking and more snack food discrimination.

Plus this is the same demo that watches the Food Network.

Mass market snacks are so 20th century to them.

[muawiyah]

Here's a trick for you. Being wheat gluten intolerant if I want a hostess cupcake I have to make my own.

Just buy a gluten free chocolate cake mix, or a brownie mix.

Double the chocolate content. Use olive oil (EVOO) instead of lard or butter. No extra sugar.

Make it in a muffin tin.

Let cool about 10 minutes. Spray a cream filling into the interior. Cool for another hour or so.

You can put a thin chocolate icing on top.

EAT IMMEDIATELY!

Not having had the real product for many years I can tell you that if it LOOKS LIKE a Hostess product, it tastes better due to absence.

[faucetman]

You can make Twinkies without union bosses and benefits, but you can’t make them without sugar.

[faucetman]

You can make Twinkies without union bosses and benefits, but you can’t make them without sugar.

[faucetman]

You can make Twinkies without union bosses and benefits, but you can’t make them without sugar.

[faucetman]

You can make Twinkies without union bosses and benefits, but you can’t make them without sugar.

[Gator113]

Don’t worry... back in the 50’s they taught us how to make ‘em.

http://www.youtube.com/watch?v=QyfCxrKW3XY

[nicksaunt]

No heterosexual male that I know would ever take a picture like that.

[reaganaut]

Hostess changed their formulas a few years back, I’ve had both Twinkies and cupcakes and they are no where near as good as they used to be. Its the New Coke but worse.

[jobim]

Twinkies were invented in the Chicagoland area in 1930. I heard it said somewhere that to this day, Windy City Area folk down more of ‘em than anyplace else. I know I ate my share there in the 50s & 60s.

[cynwoody]

Deep-fried Twinkie
Recipe

Place carefully in hot oil. The Twinkie will float, so hold it under with a utensil to ensure even browning. It should turn golden in 3 to 4 minutes.