Twinkies Gone: Hostess Emergency Liquidation Approved By Court Judge
The Twinkies have officially gone down the Drain (pun intended). According to MarketWatch, the maker of Twinkies and Wonder Bread said they had previously filed an emergency motion to begin liquidation of assets with the U.S. Bankruptcy Court for the Southern District of New York. As previously reported on The Inquisitr, mediation broke down between Hostess and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union. With no other choices available, Hostess Brands Inc. announced Wednesday that its request to wind down the business via an emergency liquidation was given court approval by U.S. Bankruptcy Judge Robert Drain.
Hope that the Twinkies might be saved came when Judge Drain adjourned the hearing two days ago. He told the Hostess executives and the Union bosses that they needed to negotiate terms that might keep the company from permanently sinking.
“I’m giving the union as well as the debtors and their lenders a last chance to try and work those issues out in private,” Drain said November 19. He cited “serious questions as to the logic behind the decision” to strike.
Hostess officially says it was forced into liquidation after the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and its 5,000 Hostess workers went on strike November 9. The disagreements came to a heard when Judge Drain imposed contract concessions opposed by 92 percent of the union’s members, causing the union to walk out on negotiations.
“Unfortunately, the last-minute mediation efforts by Judge Drain were not successful,” Ken Hall, general secretary- treasurer of the Teamsters union that represents Hostess drivers, said in a statement. “This is a tragic outcome.”
There is a silver lining for the Hostess workers. The quick asset sales allowed by the emergency liquidation may preserve some jobs. It was reported that a prospective buyer visited a Drake’s cake factory yesterday and asked whether its acquirer “could rehire employees who worked here.” If the factories do reopen they would likely be worked by non-unionized employees. Unfortunately, 15,000 of these workers will be fired immediately today so they can start receiving unemployment benefits.
According to Bloomberg, Hostess “will retain 3,200 of its workers for the initial phase of the liquidation, and cut 94 percent of its staff within the first 16 weeks of the process, completing the liquidation in one year. As a result, 33 bakeries, 565 distribution centers and 570 bakery outlet stores will be closed, resulting in the loss of 5,500 delivery routes and 18,500 jobs.”
What do you think about the Twinkie-maker Hostess going into emergency liquidation?