Skip to main content

Hostess Bankruptcy

Twinkies maker Hostess Brands files for bankruptcy protection


Hostess Bankruptcy - Hostess filing for bankruptcy again? There are reports that Hostess, the maker of Twinkies, could be headed back to bankruptcy court. According to sources, the company is more than $860 million in debt. The company bounced back from its first round of bankruptcy in 2009.

Hostess, baker of Twinkies, Ding Dongs, Ho-Ho's and Wonder Bread, is hoping that twice-baked is the key to its future. The company said Wednesday that it filed for bankruptcy protection in an attempt to shrink a pile of debt amid soaring labor costs.
The Chapter 11 filing comes just two years after a predecessor company emerged from bankruptcy proceedings. Hostess blamed the current move on troubles with its pension and medical benefits obligations, increased competition and tough economic conditions.
The company's other problem is that health-conscious Americans favor yogurt and energy bars over the dessert cakes and white bread they devoured 30 years ago.
advertisement
Last year, 36 percent of Americans ate white bread in their homes, down from 54 percent in 2000, according to NPD Group. Meanwhile, about 54 percent ate wheat bread, up from 43 percent in 2000.
Consumption of healthy snacks is growing, too. About 32 percent of Americans ate yogurt at least once in two weeks in 2011, for instance, up from 18 percent in 2000.
"We're less likely to be snacking on items that we shouldn't be snacking on," said Harry Balzer, chief industry analyst for The NPD Group, a consumer marketing research firm.
Hostess, which is a privately held, doesn't disclose sales figures. But analysts say the iconic brand has been hurt by Americans' changing eating habits.
To be sure, Hostess' snacks don't neatly fit into the U.S. trend toward a healthier lifestyle that includes a diet rich in whole wheat foods, fruits and vegetables.
The Twinkies fans out there shouldn't fret, however. The privately held Irving, Texas bakery company says it will be able to maintain routine operations to keep shelves stocked with the spongy, yellow snack and other Hostess pasteries thanks to a $75 million financing commitment from a group of lenders.
Reports had surfaced earlier in the week that the company was planning to make a bankruptcy filing.
Hostess said that it will look to restructure into a "strong, competitive" company. It will continue to run bakeries, outlet stores and distribution centers and deliver its goods during the process.
Hostess, founded in 1930, operates about 36 bakeries in the U.S. and employs about 19,000 people, a majority of whom are members of 12 unions.
The company listed the Bakery & Confectionery Union & Industry International Pension Fund, to which it owes $944.2 million, as its largest unsecured creditor.
To reorganize itself, the company must withdraw from multiemployer pension plans, address legacy health and welfare costs and secure new capital to modernize its production and distribution operations, Irving, Texas-based Hostess said.
The company had total assets of $981.6 million and liabilities of $1.43 billion as of December 10, 2011.
The privately held company said it had made efforts to sell its businesses and other M&A alternatives, including reaching out to companies like Smuckers, Kraft, Blackrock, KKR and others without any success.

"We remain hopeful that we can reach an agreement that will allow us to amend our labor contracts so that we can emerge from Chapter 11 as a highly competitive company that provides secure jobs for our employees," Chief Executive Brian Driscoll said in a statement.

Popular posts from this blog

Royal wedding more than 24.5 million UK viewers

Royal wedding more than 24.5 million UK viewers, Prince William and Kate Middleton's Royal Wedding was watched by more than 24 million terrestrial TV viewers in the UK, according to overnight estimates from industry body Barb. The BBC achieved a large share of the UK viewing figures for Friday's (April 29) ceremony, with a peak figure of 20 million tuning in to the corporation's broadcast of the Westminster Abbey service. More than 34 million people caught at least some of the Royal Wedding coverage through the BBC, including on its iPlayer service, reports BBC News. Sky News said it had a peak of 661,000 viewers at the start of the wedding ceremony, while BBC Two, Channel 4 and Five only made up 1 per cent of the audience as the nuptials began. William and Kate's service is now in the all-time top 10 programmes in the UK, but drew less viewers than the 1966 World Cup Final (32.3 million) and Princess Diana's funeral in 1997 (32.1 million).

Guinness World Records Most live streams for a single event

Guinness World Records Most live streams for a single event, The YouTube broadcast of Prince William’s marriage to Catherine Middleton (both UK) in London, UK, on 29 April 2011 achieved a record 72 million live views, as people from 188 countries around the world tuned in to watch the event on the company’s official Royal Channel. Although this figure alone was enough to beat the 70 million streams achieved during the inauguration of US President Barack Obama in 2009, the wedding’s overall tally is likely to have been significantly higher when taking into account the millions watching via other live streaming services.

Michael jordan and yvette prieto

Michael jordan and yvette prieto, Michael Jordan is making another roster addition. To his family, that is. Via US Weekly, Jordan and new wife Yvette Prieto are expecting their first child together, after tying the knot seven months ago. Jordan, 50, and Prieto, 34, have been together for five years. Jordan has three children (Jeffrey, 24, Marcus, 22, and Jasmine, 19) from his previous marriage to Juanita Venoy, his wife of 17 years.