Hostess Brands Inc, the bankrupt maker of Twinkies snack cakes and Wonder Bread, is seeking a U.S. court's permission to go out of business after failing to get wage and benefit cuts from thousands of its striking bakery workers.
The 82-year-old Hostess, which has about $2.5 billion in sales and is one of the largest wholesale bakers and distributors of breads and snack cakes in the United States, filed the request with the U.S. Bankruptcy Court in New York early Friday morning. A hearing on the matter is set for Monday.
The Irving, Texas-based company said the liquidation would mean that most of its 18,500 employees would lose their jobs.
Hostess immediately suspended operations at all of its 33 plants across the United States as it moves to start selling assets.
We'll be selling the brands and as much of the infrastructure as we can, said company spokesman Lance Ignon. There is value in the brands. But some bakeries will never open again as bakeries.
Ignon said the company made final deliveries on Friday of products made on Thursday night. Hostess's top-selling products are its chocolate cupcakes, Twinkies cakes and its powdered sugar and frosted Donettes.
Hostess products, particularly the golden, cream-filled
Twinkies cakes, are deeply ingrained in American pop culture and have long been packed in school children's lunch boxes. Entrepreneurs on auction site eBay Inc were asking as much as $100 for a box of 10 Twinkies on Friday morning.
Raj Patel, owner of Sarah's Market in Cambridge, Massachusetts, said he was sorry to see the company go out of business. It's been around for ages, said Patel, 40. A lot of people are familiar with the brand and it's going to be tough for some people to do without.
NOT INTERESTED IN BREAD
Hostess blamed heavy debt and burdensome wage and pension obligations for its financial woes. It said a strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM), which began Nov. 9, was part of a long series of battles between labor and management that contributed to the company's inability to restructure its finances and produce and deliver products at several facilities.
But union officials and line workers said union workers had already agreed to a series of concessions over the years and the company had failed to invest in brand marketing and modernization of plants and trucks and had focused instead on enriching