IRVING, TX -- A bankruptcy judge has given Hostess Brands the green light to begin shutting down the 82-year-old company. But the iconic Twinkies, Ding Dongs and Wonder Bread brands are destined to find new homes as potential bidders have reportedly been flooding the company with inquiries.
U.S. Bankruptcy Judge Robert Drain in White Plains, NY, authorized Hostess to begin the liquidation process during a four-hour hearing on Nov. 21, a day after his last-ditch mediation effort between the Irving, TX-based company and its striking bakers' union failed.
The liquidation, which will be led by restructuring specialist Gregory Rayburn, is expected to take one year.
Hostess announced its plan to liquidate on Nov. 16 after the Bakery, Confectionery, Tobacco and Grain Millers Union, representing close to one-third of its workers, went on strike. | SEE STORY
Hostess plans to shutter 33 bakeries, 565 distribution centers and 570 bakery outlet stores as part of the liquidation process. Eventually, 18,500 employees will lose their jobs, but the company will retain a workforce of 3,200 as part of the wind down process. Hostess expects to need only about 200 employees by late March.
Hostess filed for Chapter 11 protection in January, its second bankruptcy filing in less than three years. | SEE STORY
In bankruptcy court last week, an attorney for Hostess said the company had received numerous inquiries from possible buyers. Flowers Foods Inc., the maker of Tastykake and Natures Own baked goods, is considered a likely bidder for Twinkies and other Hostess assets.
Flowers, the nation's second-largest baker by sales behind Grupo Bimbo SAB de CV, hasn't yet announced its intention to acquire any Hostess assets, but the company said last week that it had renegotiated lending terms to tap additional cash, which could signal a bid is in the making.
Flowers, which reported $2.8 billion in revenue last year, is projecting sales to rise 7% to 9% in fiscal 2012.