Hostess gets OK to begin winding down business
By CANDICE CHOI AP Retail Writer November 21, 2012 3:10PM
A bankruptcy court judge granted approval on Wednesday to a request by Hostess Brands Inc. to begin winding down its operations.
The ruling, to be followed by another hearing next week, came after the maker of Twinkies and Ding Dongs 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 and 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 they generate in annual sales.
Hostess, based in Irving, Texas, has been spending about $1 million a day in payroll without any income since it halted operations last week.
Bankruptcy Court Judge Robert Drain will consider next week Hostess’ request for approval of $1.75 million in executive bonuses — a request that unions have opposed.