Hostess Brands Inc., a privately held firm that makes Twinkies, Wonder Bread and other bakery products, is set to seek permission from a bankruptcy court to close down, perhaps as soon as today. The New York Post reports that if the bankruptcy court agrees, the company could begin its shutdown in the last week of this month.
The bankruptcy court last month approved the company's new contract with employees, cutting their pay by 8% and health benefits by 17%. Hostess employs more than 18,000 workers around the United States, and strikes in Kansas and Montana began earlier this month. The company has said that it does not have the financial resources to survive a national strike.
When the company filed for bankruptcy last January, it claimed assets valued between $500 million and $1 billion, against liabilities of more than $1 billion. The company owes more than $944 million to the Bakery & Confectionary Union & Industry International Pension Fund.
The Hostess shutdown comes at the same time that big-box retailer Wal-Mart Stores Inc. (NYSE: WMT) faces labor actions that began with walkouts at stores and warehouses on Wednesday and are scheduled to number at least 1,000 leading up to Black Friday, the day after Thanksgiving and the country's most lucrative shopping day for retailers.
A bakery workers union spokesman told the Billings Gazette, "Our local members want them to liquidate. We want new buyers to come in and buy us. This company isn't in good financial shape, and we want to take our chances with a new owner." Looks like the union is about to get its wish.
Filed under: 24/7 Wall St. Wire, Bankruptcy, Food, Labor & Unions Tagged: WMT