Hostess gets OK to begin winding down business - WTVM.com-Columbus, GA News Weather & Sports

Hostess gets OK to begin winding down business

Posted: Updated:
  • NEWSMore>>

  • LaGrange murder suspect sought in Columbus, motive unclear

    LaGrange murder suspect sought in Columbus, motive unclear

    Thursday, August 28 2014 11:25 PM EDT2014-08-29 03:25:09 GMT
    Residents in The Grove neighborhood called 911 after Hardnett, who is known to his friends as D.J., collapsed in the middle of Bailey's Way on Sunday.  He was the victim of a stabbing wound.More >>
    Residents in The Grove neighborhood called 911 after Hardnett, who is known to his friends as D.J., collapsed in the middle of Bailey's Way on Sunday.  He was the victim of a stabbing wound.More >>
  • Tree falls on Booker T. Washington apartments

    Tree falls on Booker T. Washington apartments

    Thursday, August 28 2014 11:25 PM EDT2014-08-29 03:25:00 GMT
    Residents in the Booker T. Washington apartments were startled by a booming sound they described as sounding like thunder and feeling like an earthquake.More >>
    Residents in the Booker T. Washington apartments were startled by a booming sound they described as sounding like thunder and feeling like an earthquake.More >>
  • United Way campaign kicks off

    United Way campaign kicks off

    Thursday, August 28 2014 11:23 PM EDT2014-08-29 03:23:06 GMT
    Anyone can be a hero!  That's the theme of this year's United Way campaign for the Chattahoochee Valley. Thursday was the kickoff for the annual fundraising campaign. Hundreds of people packed
    More >>
    Anyone can be a hero!  That's the theme of this year's United Way campaign for the Chattahoochee Valley. Thursday was the kickoff for the annual fundraising campaign. Hundreds of people packed the Trade Center for the kickoff luncheon, including a crew from News Leader 9.More >>

By CANDICE CHOI
AP Food Industry Writer

WHITE PLAINS, N.Y. (AP) - A bankruptcy court judge on Wednesday approved a request by Hostess Brands Inc. to begin winding down its operations.

The ruling came Wednesday after the maker of Twinkies, Ding Dongs and Wonder Bread failed in last-ditch negotiations to end a strike by its second-largest union.

Hostess now has the green light to terminate the jobs of its 18,000 workers without risking legal action, and to sell off its brands.

In court Wednesday, Hostess said it needed to begin the liquidation process quickly to take advantage of outside interest in its brands, which a banker said could fetch up to $2.4 billion. That's about how much Hostess generates in annual sales.

The banker, Joshua Scherer of Perella Weinberg Partners, told the court that interest in Hostess' brands has come from companies ranging from regional bakers to major national retailers that have long sold Hostess products.

"This is a once-in-a-lifetime opportunity to get iconic brands separate from their legacy operators," Scherer said during the bankruptcy-court hearing in White Plains, N.Y.

Hostess, based in Irving, Texas, also wanted to quickly shutter its business, because has been spending about $1 million a day in payroll without any income since it halted operations last week.

CEO Gregory Rayburn said the company will send out termination notices to its employees on Wednesday.

"Those employees now need to look for work," he said.

The snack maker's demise was years in the making. Management missteps, rising labor costs and changing tastes culminated in a crippling strike by The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union.

Hostess shut down its three dozen plants late last week after it said the strike by the bakery union hurt its ability to maintain normal production.

Management had said Hostess was already operating on razor-thin margins and that the strike was the final blow. The union meanwhile pointed to the steep raises executives were given last year, as the company was spiraling down toward bankruptcy.

"This is a very hostile situation and in some respects rightfully so," Rayburn said.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Powered by WorldNow

1909 Wynnton Road
Columbus, Ga. 31906

FCC Public File
publicfile@wtvm.com
706-494-5400
EEO Report
Closed Captioning

All content © Copyright 2000 - 2014 Worldnow and WTVM. All Rights Reserved.
For more information on this site, please read our Privacy Policy and Terms of Service.