Twinkies likely to survive sale - WFLA News Channel 8

Twinkies likely to survive sale

Posted: Updated:
DETROIT, MI (WFLA) -

Twinkie lovers, relax.

The tasty cream-filled golden spongecakes are likely to survive, even though their maker will be sold in bankruptcy court.

Hostess Brands Inc., baker of Wonder Bread as well as Twinkies, Ding Dongs and Ho Ho's, will be in a New York bankruptcy courtroom Monday to start the process of selling itself.

The company, 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 asking the court for permission to sell assets and go out of business.

But with high brand recognition and $2.5 billion in revenue per year, other companies are interested in bidding for at least pieces of Hostess. Twinkies alone have brought in $68 million in revenue so far this year, which would look good to another snack-maker.

"There's a huge amount of goodwill with the commercial brand name," said John Pottow, a University of Michigan Law School professor who specializes in bankruptcy. "It's quite conceivable that they can sell the name and recipe for Twinkies to a company that wants to make them."

Hostess has said it's received inquiries about buying parts of the company. But spokesman Lance Ignon would not comment on analysts' reports that Thomasville, Ga.-based Flowers Foods Inc. and private equity food investment firm Metropoulos & Co. are likely suitors. Metropoulos owns Pabst Brewing Co., while Flowers Foods makes Nature's Own bread, Tastykake treats and other baked goods. Messages were left for spokesmen for both companies on Sunday.

"We think there's a lot of value in the brands, and we'll certainly be trying to maximize value, both of the brands and the physical assets," Ignon said Sunday. He said it's possible some of Hostess' bakeries will never return to operation because the industry has too much bakery capacity.

Little will be decided at Monday afternoon's hearing before Bankruptcy Judge Robert Drain, Pottow said. The judge eventually will appoint a company that specializes in liquidation to sell the assets, and the sale probably will take six months to a year to complete, Pottow said.

Irving, Texas-based Hostess filed for Chapter 11 bankruptcy protection in January for the second time in less than a decade. Its predecessor company, Interstate Bakeries, sought bankruptcy protection in 2004 and changed its name to Hostess after emerging in 2009.

The company said it was saddled with costs related to its unionized workforce. The company had been contributing $100 million a year in pension costs for workers; the new contract offer would've slashed that to $25 million a year, in addition to wage cuts and a 17 percent reduction in health benefits.

Management missteps were another problem. Hostess came under fire this spring after it was revealed that nearly a dozen executives received pay hikes of up to 80 percent last year even as the company was struggling.

Then last week thousands of members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union went on strike after rejecting the company's latest contract offer. The bakers union represents about 30 percent of the company's workforce.

By that time, the company had reached a contract agreement with its largest union, the International Brotherhood of Teamsters, which this week urged the bakery union to hold a secret ballot on whether to continue striking. Although many bakery workers decided to cross picket lines this week, Hostess said it wasn't enough to keep operations at normal levels.

The company filed a motion to liquidate Friday. The shuttering means the loss of about 18,500 jobs. Hostess said employees at its 33 factories were sent home and operations suspended. Its roughly 500 bakery outlet stores will stay open for several days to sell remaining products.

News of the decision caused a run on Hostess snacks at many stores around the country, and the snacks started appearing on the Internet at inflated prices.

Follow us on TWITTER @wfla

  • 8 On Your SideMore>>

  • Squatters moving out of New Port Richey soldier's home

    Squatters moving out of New Port Richey soldier's home

    Wednesday, April 23 2014 11:04 PM EDT2014-04-24 03:04:13 GMT
    Soldier & homeowner Michael Sharkey was deployed to Afghanistan two years ago. Facebook photoSoldier & homeowner Michael Sharkey was deployed to Afghanistan two years ago. Facebook photo
    Our 8 On Your Side story about a New Port Richey soldier who says his home has been taken over by squatters is striking a nerve in the community and now, the squatters are moving out. 
    Our 8 On Your Side story about a New Port Richey soldier who says his home has been taken over by squatters is striking a nerve in the community and now, the squatters are moving out.  
  • Pricey processing issue at Tampa hair academy resolved

    Pricey processing issue at Tampa hair academy resolved

    Wednesday, April 23 2014 9:35 AM EDT2014-04-23 13:35:13 GMT
    Loretta Maloy says she always expected to pay for the courses she took those several weeks, but thought $10,000 in loans just wasn’t right.
    Loretta Maloy says she always expected to pay for the courses she took those several weeks, but thought $10,000 in loans just wasn’t right.
  • New Port Richey soldier says squatters won't leave his home

    New Port Richey soldier says squatters won't leave his home

    Wednesday, April 23 2014 8:58 AM EDT2014-04-23 12:58:50 GMT
    Soldier & homeowner Michael Sharkey was deployed to Afghanistan two years ago. Facebook photoSoldier & homeowner Michael Sharkey was deployed to Afghanistan two years ago. Facebook photo
     When soldier Michael Sharkey was deployed to Afghanistan two years ago, he asked a friend to watch over his New Port Richey house. Now, they're fighting to get their house back.
    When soldier Michael Sharkey was deployed to Afghanistan two years ago, he asked a friend to watch over his New Port Richey house. Now, they're fighting to get their house back.
  • NewsMore>>

  • Squatters moving out of New Port Richey soldier's home

    Squatters moving out of New Port Richey soldier's home

    Wednesday, April 23 2014 11:04 PM EDT2014-04-24 03:04:13 GMT
    Soldier & homeowner Michael Sharkey was deployed to Afghanistan two years ago. Facebook photoSoldier & homeowner Michael Sharkey was deployed to Afghanistan two years ago. Facebook photo
    Our 8 On Your Side story about a New Port Richey soldier who says his home has been taken over by squatters is striking a nerve in the community and now, the squatters are moving out. 
    Our 8 On Your Side story about a New Port Richey soldier who says his home has been taken over by squatters is striking a nerve in the community and now, the squatters are moving out.  
  • Fl Congressman Bill Young's widow says she won't support Jolly

    Fl Congressman Bill Young's widow says she won't support Jolly

    Wednesday, April 23 2014 9:06 PM EDT2014-04-24 01:06:14 GMT
    Photo courtesy of Beverly YoungPhoto courtesy of Beverly Young
    The widow of Congressman C.W. Bill Young says she no longer supports the man who campaigned as a “Bill Young Republican” and was elected to her husband’s seat in the House of Representatives. “No, I won’t support him,” Beverly Young said in an interview with News Channel 8.
    The widow of Congressman C.W. Bill Young says she no longer supports the man who campaigned as a “Bill Young Republican” and was elected to her husband’s seat in the House of Representatives. “No, I won’t support him,” Beverly Young said in an interview with News Channel 8.
  • Tampa Theater named one of the world's most spectacular theaters

    Tampa Theater named one of the world's most spectacular theaters

    Wednesday, April 23 2014 8:54 PM EDT2014-04-24 00:54:24 GMT
    April 23 is, according to some reports, William Shakespeare's birthday. In a nod to the Bard's enduring legacy 450 years on from his birth, as well as the UK's theatrical history, here are a few stages worth seeing, whether a play's being performed or not.
    April 23 is, according to some reports, William Shakespeare's birthday. In a nod to the Bard's enduring legacy 450 years on from his birth, as well as the UK's theatrical history, here are a few stages worth seeing, whether a play's being performed or not.
  • Most Popular StoriesMost Popular StoriesMore>>

  • Woman claims pedicure crossed the line

    Woman claims pedicure crossed the line

    Tuesday, April 22 2014 11:45 PM EDT2014-04-23 03:45:39 GMT
    A Shreveport woman said a nail tech from Style Nails in Shreveport crossed the line during a pedicure, and that she has cell phone video to prove it.
    A Shreveport woman said a nail tech from Style Nails in Shreveport crossed the line during a pedicure, and that she has cell phone video to prove it.
  • Mom bites off dog's ear to save daughter during attack

    Mom bites off dog's ear to save daughter during attack

    Tuesday, April 22 2014 2:49 PM EDT2014-04-22 18:49:19 GMT
    Image from CNN/KHOU-TVImage from CNN/KHOU-TV
    In a backyard in Alvin, swings a very lucky girl. Her name is Mackenzi Plass, or Kenzi for short, and she survived a dog attack and has undergone several surgeries."She'll be two and a half in May," said her very proud mother Chelsi Camp. "She's doing great. You wouldn't know it if you couldn't see."Mackenzi has scars on her face after the ordeal just weeks ago that put her mother's animal instincts to the test."You do whatever you can," said Camp. "I don't have physical strength at my side."...
    In a backyard in Alvin, swings a very lucky girl. Her name is Mackenzi Plass, or Kenzi for short, and she survived a dog attack and has undergone several surgeries."She'll be two and a half in May," said her very proud mother Chelsi Camp. "She's doing great. You wouldn't know it if you couldn't see."Mackenzi has scars on her face after the ordeal just weeks ago that put her mother's animal instincts to the test."You do whatever you can," said Camp. "I don't have physical strength at my side."...
  • Search halted for missing Gaboon Viper

    Search halted for missing Gaboon Viper

    Tuesday, April 22 2014 7:08 PM EDT2014-04-22 23:08:20 GMT
    The missing viper could still be out there, but the search has been halted for safety concerns.
    The missing viper could still be out there, but the search has been halted for safety concerns.
Powered by WorldNow

200 South Parker Street, Tampa, FL 33606

Telephone: 813.228.8888
Fax: 813.225.2770
Email: news@wfla.com

Can’t find something?
Powered by WorldNow
All content © Copyright 2000 - 2014 Media General Communications Holdings, LLC. A Media General Company.