Hostess heads to bankruptcy court today to liquidate assets - Cincinnati News, FOX19-WXIX TV

Hostess heads to bankruptcy court today

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QUEENSGATE, OH (FOX19) -

The bankrupt baker of Twinkies, Wonder bread and Butternut Bread will seek permission to pay bonuses to key managers while closing operations that will leave most of its 18,500 workers unemployed as it begins a liquidation process that may attract bids from private-equity firms and rivals.

A U.S. Bankruptcy Judge is set to consider Hostess's request to close its distribution centers and 36 bakeries at a hearing today in White Plains, New York. Hostess said Nov. 16 that it would shut down, claiming that a weeklong strike by its bakers' union forced the liquidation. The union blamed management's demands for the collapse, while some employees blamed both sides.

In seeking court permission Hostess said it wants to pay as much as $1.75 million in incentive bonuses to 19 senior managers during the liquidation.

 Hostess is asking the judge to approve its plan -- which would result in the firing of thousands of employees -- to shut down 36 bakeries, 242 depots, 216 retail stores, and 311 hybrid depot- store facilities, according to court filings.

Potential buyers for Hostess assets include Bimbo Bakeries, which makes Entenmann's baked goods; McKee Foods, which make Little Debbie snack cakes; and Flowers Foods, the owner of Tastykakes.

Hostess Brands, Inc. issued the following statement last week:

"A widespread strike will cause Hostess Brands to liquidate if we are unable to produce or deliver products.  If that's the case, the company will move promptly to lay off most of its 18,300-member workforce and focus on selling its assets to the highest bidders. 

"We urge our employees to remain on the job to rebuild the company.  Sixty-four percent of our workforce is composed of non-union employees and employees represented by unions that ratified our proposals for modified collective bargaining agreements.  We believe they have earned the right to rebuild Hostess.

"We know the concessions are tough, but it would make more sense for unhappy employees to simply leave the company voluntarily than to strike and cause the company to close down, forcing everyone to lose their jobs."

You can read more from Hostess Brands Inc. on the closing here.

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