Hostess Brands Inc., the maker of iconic treat Twinkies, Friday said it has filed a motion in the US Bankruptcy Court seeking permission to close its business and liquidate assets.
Hostess Brands has been forced by a Bakers Union strike to shut down all operations and sell all company assets, the company said in a statement.
The Irving, Texas-based company said it has suspended operation at all plants, but delivery of products will continue and stores will remain open for several days in order to sell already-baked products.
Hostess said a nation-wide strike started by the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union stopped its "ability to produce and deliver products at multiple facilities."
"We deeply regret the necessity of today's decision, but we do not have the financial resources to weather an extended nationwide strike," said Gregory Rayburn, chief executive officer. "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."
Hostess had filed for bankruptcy in January, following which the bankruptcy court ruled the implementation of an eight percent cut in worker's salary, reduction in pension plan obligations and as well on contributions to healthcare plans. At the same time, the court also ruled Hostess raise worker's salaries in one year's time and provide workers with a 25 percent equity stake in the company.
On Tuesday, the company gave its employees a deadline to return to work by November 15. However, yesterday night, Hostess reached a conclusion that an insufficient number of employees rejoined to work for normal operations to continue.
The move will close Hostess' 33 bakeries, 565 distribution centers, and 570 bakery outlet stores throughout the US. Hostess Brands plans to sell of its popular brands, including Hostess cakes Twinkies, CupCakes, Ding Dongs, Wonder bread among others.
by RTT Staff Writer
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