Hostess May File Drakes Brand Deal Next Week, Lawyer Says
Hostess Brands Inc., the bankrupt maker of Twinkies snack cakes and Wonder Bread, hopes to file a “stalking-horse” agreement for the Drakes brand next week, a lawyer for the bakery company said.
The statement came at a court hearing today at which Hostess is seeking permission to sell the majority of its bread brand assets and Beefsteak brand at a Feb. 28 auction.
U.S. Bankruptcy Judge Robert Drain in White Plains, New York, is being asked to approve bidding procedures and terms including a disputed $13.65 million breakup fee Flowers Foods Inc. (FLO) will get if it isn’t the winner.
Flowers is offering to buy 20 bread plants, 38 depots and other assets for $355 million, which may be increased to $360 million if certain license rights are included in the sale. Flowers also agreed to purchase the Beefsteak bread brand for $30 million.
Drain today approved a March 28 deadline for former workers to file claims for back pay, severance and the like.
Hostess, based in Irving, Texas, sought court protection in January 2012, listing assets of $982 million and debt of $1.43 billion, after years of declining sales as consumers switched to more healthful foods amid increases in labor and supply costs.
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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