Posted on 11/21/2012 1:55:29 PM PST by Perdogg
Everyone loses:
•HOSTESS JUDGE APPROVES MOTION TO WIND DOWN COMPANY•HOSTESS WINS APPROVAL TO CLOSE AND BEGIN SELLING ASSETS Next up: the Twinkie economy.
Fom Leveraged Loan:
U.S. Bankruptcy Judge Robert Drain this afternoon approved Hostess Brands’ emergency wind-down plan, as well as an amendment to its debtor-in-possession credit agreement that will allow Hostess to access the full amount of its $75 million DIP loan during its liquidation.
Drain also denied a motion filed by the U.S. Trustee to convert the case to Chapter 7, though he did not rule out the prospect of a conversion at a later date.
Hostess returned to the bankruptcy courthouse in White Plains, N.Y., this morning after a last-minute mediation yesterday between the company and its main bakers’ union failed to produce a settlement to halt liquidation of its assets. The hearing began Monday afternoon, but was delayed shortly thereafter to give the company and the Bakery, Confectionary, Tobacco and Grain Millers Union a final opportunity to engage in mediation to avert the strike the BCT began last week. But by Tuesday evening, Hostess announced that the mediation was “unsuccessful.”
Judge Drain opened today’s hearing with a brief, private chambers conference to discuss the mediation, the details of which remain confidential.
Back in open court, Hostess financial advisor Joshua Scherer, of Perella Weinberg, took the witness stand to discuss the company’s failed efforts to sell the company as a whole, and the status of its newly launched liquidation strategy.
During its Chapter 11, Hostess fielded six bids for the sale of the company as a whole, none of which passed muster, Scherer said.
In the past five days, however, since Hostess officially launched its liquidation process, the company has received “a flood of inquiries,” said Hostess lawyer Heather Lennox, of Jones Day. The company expects to file a number a number of stalking-horse bids for its assets within the next few weeks, she said.
“The number of inbound calls has been surprising, on a number of fronts,” Scherer said. Those inquiries fall into four “buckets,” he explained. Offers have come from regional bakeries, national competitors, customers (such as Wal-Mart, Kroger and Giant Eagle), and a fourth catch-all category, including large consumer products companies. Scherer said the liquidation sale has generated “very significant interest” from international buyers as well.
Many of the buyers were uninterested in the assets when Hostess was weighed down by its union liabilities, he said. “We have very significant momentum right now with, from a selling perspective, positive press,” Scherer said. “It’s critical to maintain momentum and a competitive dynamic.”
“Every day our product is off the shelf, it’s diminishing in value. Our customers get used to selling goods without our brands, and the end-users learn to live without Twinkies and Wonder Bread.”
On the stand, Hostess CEO Gregory Rayburn said he needs to terminate about 15,000 employees today so that they can collect unemployment benefits. Drain approved an employee retention plan that would keep about 3,200 employees on the job during the wind-down process.
How many of the Hostess workers do you think were Obama voters? Would make an interesting poll.
Sorry to see this happen to a company, but the union played chicken and lost.
That said, we didn’t have Twinkies around here when I was growing up.
“so much fun to put in your tummy, Tastee Kake cakes and pies.”
Hurricane Greedy.
Let's sing that old song kids......."look for, the union label".......lalala
Many of the buyers were uninterested in the assets when Hostess was weighed down by its union liabilities, he said.
You mean the Union was the problem?? Go figure. I surprised that Obama is not trying to bail Hostess out to help his union buddies..
Union suicide and failure to innovate killed this company.
As a side note-
Remember how the left has villified and condemned the junk food industry? Why isn’t Michelle dancing on the grave of Hostess?
I heard a local worker on the news say she was really mad at the union since they put her out of job. I feel for people like her. Now some other corporation will probably pick up the pieces and produce the same products just at lower cost without the union employees. I’m surprised our communist president didn’t jump in here. The bakers union must have been low on the donor list.
“Sorry to see this happen to a company, but the union played chicken and lost.”
You might want to have a look at this article from the WSJ:
http://online.wsj.com/article/SB10001424127887324352004578130912150512612.html?mod=rss_opinion_main
If it is to be believed, the Teamsters actually caused the problem with their “work rules.” Still, it is nice to see one union crap in another’s “nest.”
Free Twinkies with the purchase of every Volt. Obama could make that work.... especially if the folks (other than whites) are allowed buy GM products on their EBT cards.
Most murder-suicides are in that order. Here the baker’s union committed suicide first which murdered the company and jobs in other unions.
The first of many businesses that will fail in 0’s second term.
Well, a big day for the unions. Down goes not only an iconic, uniquely American company, but 18,500 jobs. That turdball Richard Trumka was quite proud of himself when he talked about it last week.
What was that noise again from the unions...”Live Better, Work Union?”
Ah, well... they wanted this...
No, keep 3,200 on the job to appeal all the unemployment claims on the bases that they walked out but for the 3,200 to stay on, they must agree to file every appeal necessary against the 15,000 to keep them from collecting then guarantee the 3,200 unemployment when all the work is done.
I'd like to take this time to wish all those union thugs and there famalies very Marry Christmas and a very happy and prosperous 2013.
The union members chose the wrong people to follow. Hopefully they will understand the union is not about them. It’s about eventually enslaving them.
I hope the ex-employees find ambulance chasers willing to take on the union, saying the locals did not bargain in good faith, putting national union goals ahead of the locals.
Obama’s secretary of business will have Obama issue Directive “Twinkie,” an executive order making it illegal for a business to detach its assets from a union that has fastened its suckers into the business.
This is not that different from what GM tried to do. Difference being, I suspect, the Baker’s union did not contribute as much money to Obama as the Autoworkers. GM was not allowed to pull off the leaches.
15,000
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