Have no fear, the Twinkie will survive
Even though Hostess is going into bankruptcy, a line of suitors is interested in grabbing some of its brands. And the Twinkie is one of the hottest ones.
The phones at Hostess are ringing off the hook as companies line up to pursue the 30 brands that are for sale, now that the final mediation session between the company and its striking employees has failed.
Hostess has received "a flood of inquiries" from interested buyers, attorney Heather Lennox told a bankruptcy judge in court this week, according to The Wall Street Journal.
Unfortunately, all 18,500 workers will lose their jobs at a company that should have been managed better. Hostess has been in bankruptcy before, and emerged a few years ago loaded up with debt from its private equity backers. The company was so underwater, in fact, that it couldn't buy new equipment, The New York Times reports. Hostess had more than $860 million in debt earlier this year.
Hostess is unfairly pushing all the blame for its troubles on the unions. Still, the unions do bear some responsibility here. High labor costs doomed the company; employees had formed into 12 different unions by the time the end came.
At any rate, Hostess is keeping a "skeleton staff" of 3,200 people, The Journal reports. It's trying to find buyers for 30 brands and 36 factories, and from the way the suitors are lining up, it sounds like Hostess won't have a problem with some of those brands.
"We therefore think there could be very healthy competition," Lennox told the court. Hostess may start auctioning some of its assets soon.
Hostess also plans to award bonuses to the officers and managers that helped run the company into the ground. The company is seeking $1.75 million to distribute to 19 executives for a job well done.
Some potential buyers include international companies eager for a piece of the U.S. bakery business as well as big pastry names already familiar to Americans. Flowers Foods (FLO), which makes Nature's Own bread, has been mentioned as a buyer along with Groupo Bimbo, a Mexican company that also owns the Entenmann's pastry line.
So whoever made the single bid for a $5,000 Twinkie sold on eBay, you may have a great story to tell but you probably won't have one of the last Twinkies ever made. They'll be back.
More from Top Stocks
- Hey, the BlackBerry is back
- Car sales expected to rise 12% for 2012
- 2 growth stocks restore market's faith
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] The major averages ended the midweek session with slim gains after showing some intraday volatility in reaction to the release of the latest policy directive from the Federal Open Market Committee. The S&P 500 added 0.1%, while the relative strength among small caps sent the Russell 2000 higher by 0.3%.
Equities spent the first half of the session near their flat lines as participants stuck to the sidelines ahead of the FOMC statement, which conveyed no changes to the ... More
More Market News
Fed keeps important 'considerable time' language in reference to short-term interest rates, but dissents and dots leave doubts.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'