The Twinkie Hangs On: Judge Orders Hostess to Mediate with Union

Hostess strike mediation
Twinkies won't die that easily after all.

Hostess Brands Inc. and its second largest union will go into mediation to try and resolve their differences, meaning the company won't go out of business just yet. The news came Monday after Hostess moved to liquidate and sell off its assets in bankruptcy court citing a crippling strike last week.

The bankruptcy judge hearing the case said Monday that the parties haven't gone through the critical step of mediation and asked the lawyer for the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, which has been on strike on Nov. 9, to ask his client, who wasn't present, if the union would agree to participate. The judge noted that the bakery union went on strike after rejecting the company's latest contract offer, even though it never filed an objection to it.

"Many people, myself included, have serious questions as to the logic behind this strike," said Judge Robert Drain, who heard the case in the U.S. Bankruptcy Court in the Southern District of New York in White Plains, N.Y. "Not to have gone through that step leaves a huge question mark in this case."

Hostess and the union are expected to begin the mediation process on Tuesday.

Irving, Texas-based Hostess, weighed down by debt, management turmoil, rising labor costs and the changing tastes of America, decided on Friday that it no longer could make it through a conventional Chapter 11 bankruptcy restructuring. Instead, it's asked the court for permission to sell assets and go out of business.

It's a far cry from when the maker of Twinkies, Ding Dongs and Ho Ho's filed for bankruptcy in January, its second Chapter 11 filing in less than a decade. The company had hoped to emerge with stronger financials. It brought on CEO Gregory Rayburn as a restructuring expert and was working to renegotiate its contract with labor unions.

But Rayburn wasn't able to reach a deal with the bakery union, which went on strike Nov. 9. Rayburn said that Hostess was already operating on razor thin margins and that the strike was the final blow.

The company's announcement on Friday that it would move to liquidate prompted people across the country to rush to stores and stock up on their favorite Hostess treats. Many businesses reported selling out of Twinkies within hours and the spongy yellow cakes turned up for sale online for hundreds of dollars.

Even if Hostess goes out of business, its popular brands will likely find a second life after being snapped up by buyers. The company says several potential buyers have expressed interest in the brands. Although Hostess' sales have been declining in recent years, the company still does about $2.5 billion in business each year. Twinkies along brought in $68 million so far this year.




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Robert

Little Debbie's Cloud Cakes nearly identical to Twinkies. Cream-filled sponge cakes.

November 23 2012 at 11:48 AM Report abuse rate up rate down Reply
gllfastpitch

Love it! The headline "Judge Orders Hostess to Mediate with Union" implies that the evil corporate Hostess had to be FORCED into mediation with the poor union when in fact the article indicates the judge had to ask THE UNION to agree to mediate. It's this type of subtle bias that the left uses knowing that 90% of the herd is only going to form their opinion from reading a tagline rather than the substance of the article. Same thing in an article last week. Tagline "Business owner punishes workers for Obama win". No where in the actual article was their any mention of employees being "punished". Just a correlation to the fact that employees will most likely have to be laid off because of the negative effects of the administrations policies on their industry. It's absurd.

November 21 2012 at 7:00 AM Report abuse +2 rate up rate down Reply
HUTTO

just goes to show about the censores in your blog.will not return to your reply or your web

November 21 2012 at 6:54 AM Report abuse rate up rate down Reply
hog2191hd

keep wanting more pay in this time of day ,be glad you have a job dum dums, they will hire illegals to do your job dum dum

November 21 2012 at 6:25 AM Report abuse +3 rate up rate down Reply
1 reply to hog2191hd's comment
HUTTO

you have got to be a full blown idiot.hostess has embezzeled it's own company and they are playing a romney bain game.i do hope (if you work) they don't come in and do they same to you.sounds like you are one of the same kind, a dead beat wall streeter who is corupt to the core.again,just another idiot

November 21 2012 at 6:52 AM Report abuse -2 rate up rate down Reply
1 reply to HUTTO's comment
WhiteVOICES

You better be glad to have those Romney type people who work and keep food on your table. Idiot. If you don't like it and are so darned smart, buy the company and run it yourself.

November 24 2012 at 12:31 AM Report abuse +1 rate up rate down
idgaf38

The goal was to keep 18,000 people working. 5,000 people decided that was not a good idea. No matter whose fault the shape of the company is, they should all help to save it. Any management that took raises should be released without his bonus!!!

November 21 2012 at 5:52 AM Report abuse +1 rate up rate down Reply
idgaf38

The goal was to keep 18,000 people working. 5,000 people decided that was not a good idea. No matter whose fault the shape of the company is, they should all help to save it....

November 21 2012 at 5:50 AM Report abuse rate up rate down Reply
richagrig

Fire all the strikers and re hire people who aren't going to act lke someone owes them a job. I'm so sick and tired of the lazy crybabies that are always complaining there not getting enough. Shut the hell up and be glad you have a damm job you lazy morons. There are millions out of work that would take your place just to be able to work. ...I'd like to know how many of these crybabies are white, black, brown...just to see who is crying. I think there is growing trend of workers that are just crybabies, and somebody needs to start keeping track of this BS. I don't care who or what color they are I just want to start calling it what it is.

November 21 2012 at 4:23 AM Report abuse +3 rate up rate down Reply
dvdfrnzwbr

Mitt Romney says, "What is a Twinkie and why would someone choose to eat one instead of crème brule or krep süzet?"

November 21 2012 at 12:39 AM Report abuse +1 rate up rate down Reply
dvdfrnzwbr

This is enough to piss off the Pope.

November 21 2012 at 12:32 AM Report abuse -1 rate up rate down Reply
t_trevor2

The bankruptcy judge, an impartial source who is more familiar with this case than anybody, has made it clear he believes the evidence points to a single (ir)responsible party:

The judge noted that the bakery union went on strike after rejecting the company's latest contract offer, even though it never filed an objection to it.

"Many people, myself included, have serious questions as to the logic behind this strike," said Judge Robert Drain, who heard the case in the U.S. Bankruptcy Court in the Southern District of New York in White Plains, N.Y. "Not to have gone through that step leaves a huge question mark in this case."

November 20 2012 at 11:06 PM Report abuse +1 rate up rate down Reply
1 reply to t_trevor2's comment
bigmac0812

Interesting the CEO tripled his salary three months before he filed bankrupt, and all of the executives got raises between 60 to 100 % on a struggling company and somehow it's all the fault of workers making around $30,000/ yr on average. Stop spreading lies!

November 21 2012 at 1:28 AM Report abuse -2 rate up rate down Reply
1 reply to bigmac0812's comment
t_trevor2

Even more interesting that you could be dumb enough to remain oblivious to the fact that Hostess CEO Greg Rayburn and each of his top 3 executives have all been working under employment contracts that pay them each $1/year through the end of 2013.

Do you have any clue what planet you're on?

November 21 2012 at 8:57 AM Report abuse rate up rate down