November 16, 2012 (WLS) — Hostess Brands announced Friday that it is winding down operations and has filed a motion with the U.S. Bankruptcy Court seeking permission to close its business and sell its assets, including its iconic brands and facilities.
Bakery operations have been suspended at all plants. Delivery of products will continue and Hostess Brands retail stores will remain open for several days in order to sell already-baked products.
The Board of Directors authorized the wind down of Hostess Brands to preserve and maximize the value of the estate after one of the company’s largest unions, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, initiated a nationwide strike that Hostess says crippled the company’s ability to produce and deliver products at multiple facilities.
On Monday, Hostess Brands permanently closed three plants as a result of the work stoppage. On Wednesday, the company announced it would be forced to liquidate if sufficient employees did not return to work to restore normal operations by 4 p.m., CST.
The BCTGM in September rejected a what Hostess called its ” last, best and final offer.”
“Hostess Brands is unprofitable under its current cost structure, much of which is determined by union wages and pension costs. The offer to the BCTGM included wage, benefit and work rule concessions but also gave Hostess Brands’ 12 unions a 25 percent ownership stake in the company, representation on its Board of Directors and $100 million in reorganized Hostess Brands’ debt,” a Hostess press release said.
In addition to dozens of baking and distribution facilities around the country, Hostess Brands will sell its popular brands, including Hostess, Drakes and Dolly Madison, which make cake products such as Twinkies, CupCakes, Ding Dongs, Ho Ho’s, Sno Balls and Donettes. Bread brands to be sold include Wonder, Nature’s Pride, Merita, Home Pride, Butternut, and Beefsteak, among others.
The wind down means the closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes and 570 bakery outlet stores throughout the United States.
For employees whose jobs will be eliminated, additional information can be found at http://www.hostessbrands.info. The website also contains information for customers and vendors. Most employees who lose their jobs should be eligible for government-provided unemployment benefits.