Hostess Seeks to Cut Retiree Benefits by $1.1 Million
Hostess Brands Inc., the defunct maker of Twinkies and Wonder Bread, told a bankruptcy court that it must cut $1.1 million a month in retiree benefits as part of its liquidation plan.
U.S. Bankruptcy Judge Robert Drain in White Plains, New York, today approved formation of a committee of retired employees to defend their rights in connection with the intended cuts. Drain is also being asked to consider Hostess’s request to close and its bid to pay as much as $1.75 million in incentive bonuses to 19 senior managers during the company’s wind-down.
Hostess, based in Irving, Texas, said it was forced to opt for liquidation after the bakers’ union went on strike Nov. 9. The Bakery, Confectionery, Tobacco Workers & Grain Millers International Union, representing about 5,000 Hostess workers, walked out after Drain imposed contract concessions opposed by 92 percent of its members.
The union and a pension fund have asked the judge to appoint a trustee to take control of the wind-down.
Hostess sought court protection in January, its second time in bankruptcy, listing assets of $982 million and debt of $1.43 billion. The 82-year-old maker of Hostess CupCakes, Ding Dongs and Ho Hos has endured years of declining sales as Americans turned to rivals’ snacks and breads, while ingredient costs and labor expenses climbed.
The case is In re Hostess Brands Inc., 12-22052, U.S. Bankruptcy Court, Southern District of New York (White Plains).
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