story from Bloomberg News
Hostess Brands Inc., the maker of Wonder bread and Twinkies, said it will shut down and liquidate after a strike by members of its bakery workers’ union “crippled” the company’s operations.
“We deeply regret the necessity of today’s decision, but we do not have the financial resources to weather an extended nationwide strike,” Chief Executive Officer Gregory F. Rayburn said in a statement. “Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders.”
The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike Nov. 9 after a bankruptcy judge in White Plains, New York, imposed contract concessions that 92% of the union’s workers rejected.
Hostess closed three of its 36 plants permanently Nov. 12, blaming the strike. Hostess said it determined last night that not enough employees had returned to work to restore normal operations. The wind-down will close the remaining 33 bakeries and 565 distribution centers, Hostess said.
Rayburn said this week the company would seek authorization to shut down entirely on Nov. 20. It will ask the judge to hold a liquidation hearing Nov. 19, he said.
Hostess, based in Irving, Texas, filed under Chapter 11 for a second time in January, listing assets of $982 million against liabilities totaling $1.43 billion.