Posted on 11/16/2012 4:35:56 AM PST by Vince Ferrer
RVING, TEXAS, NOV. 16, 2012 — /PRNewswire/ -- 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."
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.
Twilight of the Twinkies.
Hostess has buyers lined up already. And those buyers want the brands and the recipes only. The don’t want the Hostess drivers and bakers. They already have their own. And any private equity company that might buy the brands will not buy the operations and bakeries, either. The baking business is a terrible business these days and there’s a ton of overcapacity.
“Another case of unions hanging themselves.”
After these workers run out their unemployment benefits and are forced to look for work, what is the likelihood that company will be unionized? I think it unlikely. So the unions hang themselves twice in this case.
I am going to buy a package of Twinkies to enjoy one last time.
You'd think with Baraq handing out all those food stamps and TANF the business would be booming.
Bet they won’t be so happy looking soon, and I know they won’t be eating twinkies.
“Well, let’s say this Twinkie represents the normal amount of socialism in the United States. According to this morning’s sample it would be a Twinkie…thirty-five feet long weighing approximately six-hundred pounds.”
The Bottom Line..............
Because of the threats and violence that the union thugs will put on the new workers. Violence is the only real tool unions have.
” Most employees who lose their jobs should be eligible for government-provided unemployment benefits. “
That oughta pay a good, living wage.
“they were able to strike and shut the place down because being out of work paid more than working.”
They will find out that the claim made is false. Bakers, union or not, are well paid and they are going to have a very tough job keeping their hearth and home together in one piece.
I guarantee you that we will be seeing stories about these bakers losing their homes. Tough darts you goobers.
As Dear Leader Obama once said: “Elections have consequences.”
Vote to unionize a shop and suffer the consequences.
Vote for greedy commie thugs as your union leaders and suffer the consequences.
Vote for a racist, power mad, commie thug as president of the USA and suffer the consequences.
Drake's Coffee Cake and Drake's Devil Dogs, two of our favorites.
None of the look-alike products from other bakeries have quite the same flavor and quality.
Better to take an 100% pay cut than an 8% pay cut! Morons.
Last I checked with the HR drones, yes. You may not ask about past union membership, but you can (as I understand it, consult an appropriate lawyer for official advice before doing anything) ask who they voted for.
This is, as I understand it, legal. (I am not a lawyer.) You cannot ask about prior union membership or you open yourself up to charges. But you certainly are still allowed to say, “If this person was employed by company X, I do not want them working for me as I view the company as incompetent in their selection of personnel” or other similar declared logic.
I thought of that too. Blacklists that are based on information like that are also illegal.
And unnecessary if you are looking at resumes and know how to use Google.
I’m tired of following the left’s laws. Eff em.
Amazing how stupid the Union Mentality is. I've seen this crap over and over. They will go on strike for months for a 25 cent raise and if you figure in the wages lost in the strike it takes them 10 years or more just to break even. Sometimes longer. But the Union Fatcats get their checks no matter what.
The mind boggles at the stupidity involved.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.