Fat boy
01-12-2012, 08:53 AM
http://dealbook.nytimes.com/2012/01/11/hostess-files-for-bankruptcy/
Hostess Brands, known for sweet treats like Twinkies and Ding Dongs, is back in Chapter 11.
The company went from cream filling to bankruptcy filing on Wednesday, just three years after emerging from an earlier restructuring.
The company has been struggling under the weight of an $860 million debt load and soaring expenses tied to its labor force. Hostess has up to 100,000 creditors, chief among them labor unions and pension funds that represent the company’s employees, according to the Chapter 11 petition filed in United States Bankruptcy Court in New York.
“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,” the company’s president and chief executive, Brian J. Driscoll, said in a statement. If the company is unable to reach a new labor deal, Hostess said it would ask the bankruptcy court to halt the existing agreement.
But those with sweet-tooths across the country need not fret. Hostess said its return to bankruptcy would not disrupt the company’s sale of baked goods. And executives are optimistic that, as it did last time around, Hostess will climb out of bankruptcy.
“With generations of loyal consumers, numerous iconic products and a talented and experienced work force, Hostess Brands has tremendous inherent strengths to build upon,” Mr. Driscoll said.
Hostess, a privately held company based in Irving, Tex., has built an expansive list of products over the decades, perhaps none more craved than Twinkies. In addition, the company makes Wonder and Nature’s Pride bread, Drake’s snack cakes and other well-known brands.
Twinkies, the cream-filled sponge cakes, have been a guilty pleasure for decades. Jimmy Dewar, the creator of the tasty treat, once remarked: “Twinkies was the best darn-tootin’ idea I ever had.”
But over the last several years, concerns grew that the baked goods might outlive the 82-year old company itself. In 2004, confronted with escalating labor costs and fluctuating prices of flour and other ingredients, the company filed for Chapter 11. Hostess, then known as the Interstate Bakeries Corporation, completed the restructuring process in February 2009, when Ripplewood Holdings, a New York private equity firm, seized control.
Hostess Brands, known for sweet treats like Twinkies and Ding Dongs, is back in Chapter 11.
The company went from cream filling to bankruptcy filing on Wednesday, just three years after emerging from an earlier restructuring.
The company has been struggling under the weight of an $860 million debt load and soaring expenses tied to its labor force. Hostess has up to 100,000 creditors, chief among them labor unions and pension funds that represent the company’s employees, according to the Chapter 11 petition filed in United States Bankruptcy Court in New York.
“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,” the company’s president and chief executive, Brian J. Driscoll, said in a statement. If the company is unable to reach a new labor deal, Hostess said it would ask the bankruptcy court to halt the existing agreement.
But those with sweet-tooths across the country need not fret. Hostess said its return to bankruptcy would not disrupt the company’s sale of baked goods. And executives are optimistic that, as it did last time around, Hostess will climb out of bankruptcy.
“With generations of loyal consumers, numerous iconic products and a talented and experienced work force, Hostess Brands has tremendous inherent strengths to build upon,” Mr. Driscoll said.
Hostess, a privately held company based in Irving, Tex., has built an expansive list of products over the decades, perhaps none more craved than Twinkies. In addition, the company makes Wonder and Nature’s Pride bread, Drake’s snack cakes and other well-known brands.
Twinkies, the cream-filled sponge cakes, have been a guilty pleasure for decades. Jimmy Dewar, the creator of the tasty treat, once remarked: “Twinkies was the best darn-tootin’ idea I ever had.”
But over the last several years, concerns grew that the baked goods might outlive the 82-year old company itself. In 2004, confronted with escalating labor costs and fluctuating prices of flour and other ingredients, the company filed for Chapter 11. Hostess, then known as the Interstate Bakeries Corporation, completed the restructuring process in February 2009, when Ripplewood Holdings, a New York private equity firm, seized control.