After a long battle with the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) over proposed cuts to wages, Twinkie maker Hostess Brands announced this morning that it has filed a motion with the U.S. Bankruptcy Court seeking permission to close down its business and sell off its assets. In a word, the company is liquidating and moving to lay off 18,500 workers.

Bakery operations have been suspended at all plants. Delivery of Hostess products including Twinkies, Ding Dongs, Wonder Bread, and Nature's Pride bread will continue and Hostess Brands retail stores will remain open for several days to sell already baked products. The winding down means the closure of 33 bakeries, 565 distribution centers, approximately 5,500 delivery routes, and 570 bakery outlet stores throughout the United States.

Hostess is currently unprofitable and operating under Chapter 11 bankruptcy protection. The company had asked BCTGM to approve a new contract in which the workers would accept lower pay and benefits in exchange for a 25% ownership stake in the company, $100 million in reorganized company debt, and representation on the board of directors. Instead, 92% of BCTGM union members voted to call a nationwide strike against Hostess, forcing the company to suspend baking at three of its plants on Nov. 12. When management's request for employees to resume work was declined, the company says it had no option but to shut down.

"We deeply regret the necessity of today's decision," said Hostess CEO Gregory F. Rayburn in a statement, "but we do not have the financial resources to weather an extended nationwide strike. Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders."


In its own press release, the union said: "The truth is that Hostess workers and their Union have absolutely no responsibility for the failure of this company. That responsibility rests squarely on the shoulders of the company's decision makers."

The article Twinkie Maker Hostess Shutting Down originally appeared on Fool.com.

Fool contributor Rich Smith has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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