Market Snapshot
  • U.S.
  • Europe
  • Asia
Ticker Volume Price Price Delta
DJIA 16,501.65 -12.72 -0.08%
S&P 500 1,875.39 -4.16 -0.22%
NASDAQ 4,126.97 -34.49 -0.83%
Ticker Volume Price Price Delta
STOXX 50 3,189.83 13.86 0.44%
FTSE 100 6,702.69 27.95 0.42%
DAX 9,581.68 37.49 0.39%
Ticker Volume Price Price Delta
NIKKEI 14,404.99 -141.28 -0.97%
TOPIX 1,164.90 -8.91 -0.76%
HANG SENG 22,540.20 30.56 0.14%

Hostess Brands Obtains Court Authority to Wind Down All Operations, Liquidate Assets



Hostess Brands Obtains Court Authority to Wind Down All Operations, Liquidate
                                    Assets

PR Newswire

IRVING, Texas, Nov. 21, 2012

IRVING, Texas, Nov. 21, 2012 /PRNewswire/ -- Hostess Brands Inc. announced
that the U.S. Bankruptcy Court for the Southern District of New York today
approved its emergency interim motion for the orderly wind down of its
business and sale of its assets.

Judge Robert Drain approved the motion after the Company and the Bakery,
Confectionery, Tobacco and Grain Millers Union (BCTGM) were unable to reach an
agreement during an 11^th-hour mediation yesterday.

Hostess Brands is winding down the Company after a nationwide strike initiated
by the BCTGM that commenced on November 9^th crippled its operations at a time
when the Company lacked the financial resources to survive a significant labor
action.

Among other provisions, the Court order allows Hostess Brands to return excess
ingredients and packaging; provides liquidity through an amended
debtor-in-possession financing agreement and consensual use of cash
collateral; and authorizes the Company to implement a non-executive employee
retention plan to ensure the Company has the necessary personnel to implement
the wind down. 

Hostess Brands said it intends to retain approximately 3,200 employees to
assist with the initial phase of the wind down.  Employee headcount is
expected to decrease by 94% within the first 16 weeks of the wind down. The
entire process is expected to be completed in one year.

The wind down was necessitated by an inflated cost structure that put the
Company at a profound competitive disadvantage.  The biggest component of the
Company's costs was its collective bargaining agreements that covered 15,000
of 18,500 employees. 

Hostess Brands worked tirelessly to complete a reorganization of its business
as a going concern, including spending the better part of 18 months
negotiating with its key constituents to obtain a consensual agreement to
lower costs to a sustainable level.  The Company had obtained the support of
its largest union, the International Brotherhood of Teamsters, and its
lenders.  However, the BCTGM leadership chose not to negotiate a new labor
contract and instead, when presented with a final offer, launched a campaign
to cripple the Company's operations and force it to liquidate.

The wind down means the closure of 33 bakeries, 565 distribution centers,
approximately 5,500 delivery routes, 570 bakery outlet stores and the loss of
18,500 jobs.

Prospective bidders for the Company's assets should contact the following
representatives.

Brands: Perella Weinberg at hostess@pwpartners.com
Assets: FTI Consulting at hostess@fticonsulting.com

For employees whose jobs will be immediately eliminated, additional
information can be found at www.hostessbrands.info.  The website also contains
a copy of the Company's wind down motion and information for customers and
vendors.

About Hostess Brands

Founded in 1930 and based in Irving, Texas, Hostess Brands' products have
included iconic brands such as Hostess®, Wonder®, Nature's Pride®, Dolly
Madison®, Drake's®, Butternut®, Home Pride® and Merita®.  Hostess Brands has
approximately 18,500 employees and operates 33 bakeries, 553 distribution
centers, approximately 5,500 delivery routes and 527 bakery outlet stores
throughout the United States.

SOURCE Hostess Brands

Contact: Lance Ignon, Lance_ignon@sitrick.com, or Tom Becker, Sitrick And
Company, +1-212-573-6100, +1-415-793-8851, or Anita-Marie Laurie, or Tammy
Taylor, Sitrick And Company, +1-310-788-2850; or Erik Halvorson, Hostess
Brands, Erik.halvorson@hostessbrands.com
Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement