Hostess Union Challenges Wind-Down, Management Bonus Plan

A Hostess Brands Inc. union and a pension fund said they are appealing the court order that gave the bankrupt Twinkie maker permission to wind down.

U.S. Bankruptcy Judge Robert Drain, at a Nov. 29 hearing in White Plains, New York, approved Hostess’s requests to shut down and to pay as much as $1.83 million in incentives to 19 senior managers, while overruling objections to the bonuses.

The creditors are appealing the wind-down order entered in the case on Nov. 30, according to court papers filed today by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and the Bakery and Confectionery Union and Industry International Pension Fund.

Hostess, based in Irving, Texas, won final approval from Drain to sell its assets and eliminate about 18,000 jobs. The liquidation has drawn about two dozen bidders, including Wal- Mart Stores Inc. and Kroger Co. (KR), according to a person familiar with the matter.

Tom Becker, a Hostess spokesman, declined to comment on the on the appeal notice.

Hostess, the 82-year-old maker of Ding Dongs, Ho Hos and Drake’s Devil Dogs, said it was pushed into liquidation when the bakers’ union went on strike Nov. 9 after Drain imposed contract concessions opposed by 92 percent of the union’s members.

The company sought court protection in January, its second time in bankruptcy, listing assets of $982 million and debt of $1.43 billion.

The case is In re Hostess Brands Inc., 12-22052, U.S. Bankruptcy Court, Southern District of New York (White Plains).

To contact the reporter on this story: Dawn McCarty in Wilmington at

To contact the editor responsible for this story: John Pickering at

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